Police: Reorganisation

Lord Ackner: asked Her Majesty's Government:
	What are the likely consequences to the Western Circuit, and in particular to the county of Hampshire, of their proposals to merge police authorities, and in particular any merger of the Hampshire police force with a police force other than Dorset or Wiltshire.

Baroness Scotland of Asthal: My Lords, we are working closely with our criminal justice partners and are in the middle of the consultation process for police force restructuring. It would therefore be premature to comment on options put forward by any police force or authority as no decisions have yet been made on the viability of certain options. The restructuring debate is centred on the need for a police service that is capable of meeting the demands of serious and organised crime as well as providing effective neighbourhood policing and maintaining present strong links with the criminal justice system.

Lord Ackner: My Lords, I ask the Question with a little more than that thin veneer of confidence which characterises the few that I put before your Lordships. I do so because my noble and learned friend the Lord Chancellor gave an undertaking to the Western Circuit in July 2004 that, while he was Lord Chancellor, Hampshire would remain part of the Western Circuit. I ask whether he is prepared to abide by that assurance and whether the Government, mutatis mutandis, will do likewise.

Baroness Scotland of Asthal: My Lords, the noble and learned Lord will know that my noble and learned friend the Lord Chancellor always delivers on his promises where he is so able. The Hampshire force and authority submitted a case in December 2005 to stand alone as a single strategic force, and that is being considered. I assure the noble and learned Lord that every consideration will be given to his comments—and even greater consideration to those of my noble and learned friend.

Lord Waddington: My Lords, what are the objections to the merger of the Hampshire police force with Dorset or Wiltshire except that there would be a crossing of regional boundaries and such a solution would therefore offend against the Government's policy of regional government by stealth?

Baroness Scotland of Asthal: My Lords, I assure the noble Lord, Lord Waddington, that there is not regional government by stealth. We are absolutely clear that the purpose of the restructuring of police forces is to enable us to meet the needs of the people whom we jointly serve. We have set out the criteria, and all forces have been able to make their plans and submit their proposals, to which we will give active and proper consideration.

Baroness Harris of Richmond: My Lords, is the Minister aware that police authorities up and down the land are very concerned about the proposals? She has not been able to tell the House when the decision might be made on these proposals, and there is therefore great uncertainty about the forces that will be merged. When will the Minister be able to assure us that those decisions will be made and tell us what the costs might be?

Baroness Scotland of Asthal: My Lords, first, I assure the noble Baroness that we are very conscious of the uncertainty that has arisen as a result of this change. In response, we are giving active consideration to making the decision as speedily as possible. The noble Baroness will also know that others ask us not to put speed above effectiveness, sagacity and propriety, and we do not intend to do that either.

Viscount Bridgeman: My Lords, will the Minister assure us that the possible amalgamation of Hampshire with Dorset and Wiltshire has been considered by the consultants?

Baroness Scotland of Asthal: My Lords, all the options put forward in the plans will be considered. For instance, Her Majesty's Court Service has made some very specific comments about the benefits of keeping Hampshire in the Western Circuit and the benefits of carrying out an amalgamation in a sensitive way. We will, as I have assured the House, give every consideration to those proper matters that have been raised with us.

Lord Woolf: My Lords, does the Minister agree that one of the problems that we have had for a long time in the criminal justice system is a lack of co-ordination between the different agencies in it? In different parts of the country, those difficulties have been substantially addressed, but on the Western Circuit there is a particular problem because of the preponderance of work that goes to Winchester and the difficulty of servicing the Western Circuit properly if Winchester does not remain part of it.

Baroness Scotland of Asthal: My Lords, I agree with the noble and learned Lord about the importance that we have now given to coterminosity—having all the agencies on the same basis. The point that he makes about keeping Hampshire within the Western Circuit framework has been powerfully made in the submission by Her Majesty's Court Service in response to the consultation process. I say, for perhaps the third time, that we have heard noble and learned Lords and others who have made that powerful point. How we deal with that is a matter that will make someone put an ice pack on their head.

Lord Stoddart of Swindon: My Lords—

Baroness Tonge: My Lords—

Lord Campbell of Alloway: My Lords—

Lord Stoddart of Swindon: My Lords, I think it is this corner. Does the noble Baroness recall that when similar proposals were made by Mr Michael Howard in the previous Conservative government, the Labour Party opposed them on the basis that it would be a step towards a national police force? Can she assure me that it is not the Government's intention to proceed in that way? I say as one of the council leaders who opposed the formation of Thames Valley Police that experience has since proved significantly that bigger is not best.

Baroness Scotland of Asthal: My Lords, I cannot agree with the noble Lord's analysis. However, we have taken very seriously the HMIC review of protective services and have concluded that the current structure of policing is not fit for purpose. That is what Sir Ronnie Flanagan said, and we agree with him.

Lord Elystan-Morgan: My Lords, the noble Baroness referred to coterminosity. I accept that that has brought about considerable benefit in the past and is a matter of the utmost importance for the future, but does the Minister accept that there may be a local difficulty in Wales? If Wales has one police force, as seems likely to be the case, and Cheshire, which is now part of the Wales and Chester Circuit, does not remain a single force—as again seems highly likely—which will be sacrificed? Will it be the presence of Chester in the Wales and Chester Circuit or will it be the principle of coterminosity?

Baroness Scotland of Asthal: My Lords, neither will be sacrificed. We will have to find a solution that meets the needs of both.

Diplomatic Missions: Unpaid Traffic Fines

Lord Faulkner of Worcester: asked Her Majesty's Government:
	What steps they are taking to secure payment of unpaid congestion charge penalties, and parking and speeding fines incurred by diplomatic staff in London.

Lord Triesman: My Lords, we take every opportunity to remind diplomatic missions to meet their obligations to comply with United Kingdom law and pay promptly any fines that they incur. Following the annual Written Ministerial Statement on parking and congestion charge penalties on 12 December, we will now formally approach the heads of mission of the top 10 offenders in each category to find out what steps they are taking to pay. We will then take further action as appropriate.

Lord Faulkner of Worcester: My Lords, I thank my noble friend for that robust Answer on what is clearly a scandalous situation. Will he confirm that the sum owed in unpaid parking fines and congestion charge penalties now exceeds £3.5 million and that the worst offenders tend to be the embassies of the richest countries such as the United Arab Emirates and the United States? Is he aware that in Oslo, which introduced a congestion charge before London, all the diplomatic staff, including the British, pay the charge to drive in and out of the city each day?

Lord Triesman: My Lords, it does tend to be the larger missions which do not pay, and it is certainly true that they appear to have no difficulty in paying the charges in Singapore and Oslo. The value of outstanding parking fines at the time that this brief was drafted was £354,860. In the case of the congestion charge, the top 10 offenders owed £1,909,700. The overall amount owed at that time was around £2.9 million.

Lord Howe of Aberavon: My Lords, is the Minister aware that this is not the first time that this problem has arisen? In 1984, we faced it very directly as well as in the context of the outrage of the shooting from the Libyan Embassy. After examination by the House of Commons Foreign Affairs Committee, we concluded that parking offenders should also be declared persona non grata where necessary. Thereby, the figures were reduced from 109,000 cases in 1984 to less than 8,000 in 1989. Would the Minister be wise enough to follow that example?

Lord Triesman: My Lords, I know that this is not the first time the matter has arisen or that a Question has been asked in the House. It is certainly true that those steps were taken following the FAC report. There was also a White Paper covering these matters in 1985. We are doing our best to ensure that everybody understands that they must comply with the laws—we expect them to do so—and that there are, in the final analysis, penalties that we can deploy. However, I expect that the House would be cautious before it saw all car-driving diplomats from all our major allies expelled from the United Kingdom at the same time.

Lord Berkeley: My Lords, it is anathema to law-abiding motorists to see these people getting away with not paying their fines or congestion charges and parking in the wrong place. Is it not time to get rid of the diplomatic niceties and allow such cars to be clamped? That would send a message to diplomats in their big fat cars that they must obey the law like everyone else.

Noble Lords: Hear, hear!

Lord Triesman: My Lords, my noble friend has made a proposition that is very tempting to the House, as I could hear from the response. I will bear it in mind, but I hope that the House will also allow me to try to keep at least some semblance of an international policy in relation to this.

Lord Wallace of Saltaire: My Lords, in how many foreign capitals do British diplomats have to pay similar charges and roughly how much per year does that amount to?

Lord Triesman: My Lords, of course we pay—that goes without saying. There are two other congestion charge areas: Singapore and Oslo. Parking fines can be attracted in the majority of cities in modern nations where there are parking regulations, although not everywhere in the world, and our policy is to meet our obligations and not to avoid them.

Lord Rotherwick: My Lords, why do diplomatic travellers manage to comply with the laws in Oslo and not in this country?

Lord Triesman: My Lords, that is a good question, and I have put it myself. There does not appear to be a complete willingness to answer it in terms, but I should love to answer it in the House. I speculate here a bit, but it is conceivable that the number of cars in Oslo, for example, even for a quite big mission, is relatively small, whereas the number of cars for a very large mission in the United Kingdom is quite large. But it may also reflect the relative wealth of the nations and their ability to pay.

Lord Mackie of Benshie: My Lords—

Lord Cobbold: My Lords—

Noble Lords: Cross Bench!

Lord Cobbold: My Lords, would it not be possible to negotiate a fixed charge for each mission to cover all its vehicle movements in the area?

Lord Triesman: My Lords, leaving behind parking fines, which are accumulated as people break parking laws, a fixed sum in respect of congestion charges would require the consent of the authorities in London. That was discussed with the authorities in London, but they were not prepared to have any variation in any of the charging arrangements. I suspect that some noble Lords might have complained about that themselves. That is what would be needed to change the congestion charging arrangements for London.

Lord Mackie of Benshie: My Lords—

Lord Howell of Guildford: My Lords, could the Minister clear up the question whether the congestion charge is a charge or a tax? Is he aware that many embassies take the view that it is a tax and that, under the Vienna Convention, embassies are free from tax? There is considerable confusion on the matter. How are the Government going to resolve it?

Lord Triesman: My Lords, we have resolved it, as the noble Lord will be happy to hear. The question has been put to the Treasury, which answered it in completely robust terms having taken appropriate legal advice. I understand that, among lawyers, there is sometimes a difference of view about all the facts in the matter, but we have taken the view that this is not a tax but is akin to a toll or to other kinds of charges that are not in the nature of taxes and therefore cannot be avoided. That is our position, and we have told all diplomatic missions that.

Lord Mackie of Benshie: My Lords—

Baroness Amos: My Lords, I regret to say that we have had 15 minutes.

Rural Payments Agency

Baroness Byford: asked Her Majesty's Government:
	How well prepared the Rural Payments Agency is for ensuring that single farm payments will be made at the end of February.

Lord Bach: My Lords, the Rural Payments Agency announced in January 2005 that it expected to make payments in February 2006. The agency remains on track to commence payments in February and to complete the bulk of payments in March, in line with its target of completing 96 per cent of payments by value by the end of March. Payments will start in February, even if that involves making a substantial partial payment, although my clear preference is to make payments in full, and I expect to do that.

Baroness Byford: My Lords, I thank the Minister for his response, but how does he square up the criticism given by the EFRA Select Committee, which accused the agency of complacency? The amounts should have been paid in full, but the Minister has just said that the bulk of them will be paid, so even he is accepting that they will not be paid in full. Will he tell us, despite an £18 million overspend, what proportion of the assessments have so far been completed? Of the payments due to start in February and be completed by the end of March, is there is a contingency plan for those that will be not met?

Lord Bach: My Lords, with the greatest respect to the Select Committee from another place, I do not believe that it has done itself justice in its report. The committee misquotes me three times. I do not mind that, but I object to being called complacent, not so much on my own behalf but on the behalf of those in my department and the Rural Payments Agency who are working night and day to ensure that farmers get their payments in February and March of this year.

Lord Livsey of Talgarth: My Lords, I do not doubt that the Minister's staff are working extremely hard, but I am sure that he is aware that 80 per cent of the single farm payments were paid to Welsh farmers before Christmas, 62 per cent to Scottish farmers and 75 per cent to farmers in Northern Ireland. Why is it that farmers in England are not going to be paid even in this month and will have to wait until February? I am sure that he will also recognise that the EFRA Select Committee report that came out last week is an all-party report, and its general conclusion is:
	"We are deeply unimpressed by the failure of Defra and the Rural Payments Agency to plan properly for the process of administering payments under the single payments scheme".
	It asked Ministers to give a definitive announcement on that. Although he has made some promises, the findings of the committee do not give us a lot of confidence.

Lord Bach: My Lords, the report claimed that I had given no definitive date for when payments would start. Today I have given the House a definitive date, and I gave the EFRA Select Committee a definitive date. I do not know what more I could have done. England is not Wales. Does the noble Lord agree with that? He may even be pleased about it. Does he accept that there are many more farmers in England than there are even in Wales? Wales decided on a historic element of paying, while we decided on a more sophisticated way of paying that is more in keeping with the CAP reform that the House so supports; at least it seems to support the CAP reform when the idea is put forward but it does not seem so keen on the implementation.

Earl Peel: My Lords, what assurances will the Minister give that this highly regrettable situation will not impede the payment of the single farm payment next year? Is it a reality that next year's claims may come in before this year's claims have been dealt with?

Lord Bach: My Lords, the noble Earl as usual has hit a good point. It is one of the reasons why I am so keen that we should start paying the full payments in February this year. If we make partial payments, which would certainly be better than nothing, it may have some effect on the 2006 payments, which would be due at the end of the year.

Lord Maclennan of Rogart: My Lords—

Lord Carter: My Lords—

Baroness Amos: My Lords, it is the turn of the Labour Benches.

Lord Carter: My Lords, can my noble friend confirm that under the old IACS scheme farmers were paid between January and June 2005, so the farmers who received their payment in June 2005 are likely to receive their next payment in either February or March this year? That is nine months, whereas under the old scheme it used to be 12 months between payments.

Lord Bach: My Lords, 11 subsidy schemes ran up until the CAP reform, which was supported by all sides of the House. My noble friend is right that the dates for those schemes differed, but a number of them meant that the window for paying them closed in the middle of the year. So there would have been farmers paid last in June or even July 2005.

Lord Maclennan of Rogart: My Lords, is the Minister aware that some of the payments from the national reserve are held up in Scotland and that we are attending the conclusions? Can he give us any indication of when the size of the national reserve will be known?

Lord Bach: My Lords, very shortly.

Lord Whitty: My Lords, does the Minister agree that it is time that noble Lords opposite, the leadership of the NFU, and a Select Committee in another place recognised the complexities of this arrangement and the enormous benefits that we in England will have from the system of payment as compared with that in most of the Continent and in Wales and Scotland? Does he further agree that they strongly supported the system when it was first announced and should stop attacking the staff of the RPA and Defra in its implementation?

Lord Bach: My Lords, I agree very much with my noble friend. I am surprised that we find the attacks on the implementation of the scheme from those who supported it so warmly when it came in. The new financial system is part of the reform of the CAP, which signals the biggest shake-up in English farming for more than 30 years. The single payment scheme increases farmers' freedom to innovate and respond to changing consumer demands. Additionally, they have to meet new baseline standards for agriculture. Everyone agreed that this was a good change; I wish that they would support it now.

Child Support Agency

Lord Skelmersdale: asked Her Majesty's Government:
	What changes they intend to make to the operation of the Child Support Agency.

Lord Hunt of Kings Heath: My Lords, the chief executive of the Child Support Agency has been asked to undertake a root and branch review of the operations of the agency. He has reported his findings to Ministers, and an announcement will be made shortly.

Lord Skelmersdale: My Lords, I confess that I was expecting a slightly different Answer, because various activities have been revealed in speeches from the Secretary of State and in press briefings, not least the contracting-out of debt collecting pertaining to the Child Support Agency. How many cases are under review? The noble Lord will know that I have been in correspondence about one such case. It would be wrong for debts to be collected from absent parents in such circumstances, would it not?

Lord Hunt of Kings Heath: My Lords, there have been various stories in the media in the past few weeks, but I think it better that we await the announcement that my right honourable friend the Secretary of State will make to Parliament in due course, following the report that we received from the chief executive. Notwithstanding the many challenges and problems that the CSA faces, £600 million a year is collected in maintenance for children. Clearly we want to do better than that, and one challenge that we face is that many non-resident parents do not face up to their responsibility to pay maintenance for their children. We are certainly looking for a much stronger enforcement effort by the CSA to help to make sure that we collect more money for more children.

Lord Northbourne: My Lords, have the Government issued any guidelines or taken any other action to ensure that young men in school are taught about their responsibilities as fathers?

Lord Hunt of Kings Heath: My Lords, that is not a matter for the Department for Work and Pensions, but I very much understand that issue. Going beyond the operational responsibilities of the Child Support Agency, I should say that we need to do much more to bring home to young people—and to all parents—their responsibility. When they split up, it is important that the children do not become a tug of war between the resident and non-resident parent and that we reinforce the rights and responsibilities of all parents, including responsibility for financial support for their children. I very much agree with the noble Lord.

Baroness Hollis of Heigham: My Lords, my noble friend has emphasised—rightly, I am sure—that the core of the problem of the CSA is that too many non-resident parents think that, when they break up with their partner, they simultaneously no longer need financially to support their children. That is disastrous for everyone concerned. The Inland Revenue may become a collection agency and collect money from defaulting families, which may be a good idea. So often, at the same time, it may pay tax credits to those defaulting families. Can we hope that at last the Inland Revenue might be willing to net the one sum against the other and thus ensure that money goes to the lone parent and her child?

Lord Hunt of Kings Heath: My Lords, I pay tribute to my noble friend for her work in this area and particularly for the work that she led in making the assessment scheme much easier to understand than the old scheme. She asked two hypothetical questions, neither of which I ought to answer, in anticipation of our Statement to Parliament. There is co-operation between HMRC and the CSA, and of course we wish to encourage more in future.

Lord Forsyth of Drumlean: My Lords, what are the costs of the Child Support Agency—

Lord Molyneaux of Killead: My Lords, how is it possible for the Treasury to justify payments to a body that is so utterly incompetent in every part of the kingdom?

Lord Hunt of Kings Heath: My Lords, I would not underestimate the challenges and problems that the Child Support Agency faces. Equally, I re-emphasise to noble Lords that it is raising £600 million, that half a million children benefit and that the staff at the CSA work under very difficult circumstances, often caught in the middle of warring parents. It is easy to complain—I do not at all underestimate the problems faced—but we ought to acknowledge the good work still being undertaken.

Lord Oakeshott of Seagrove Bay: My Lords, when I was preparing to ask this question, my initial thought was that I might quote the House of Commons Select Committee report calling the CSA a failing organisation that is in crisis, but I am afraid that I am not as brave as my acting leader in the other place.
	The noble Baroness, Lady Hollis, put her finger on a serious point by mentioning the Revenue. Does the Minister accept, as the Prime Minister said, that the CSA has lost the confidence of the public, its basic structural problems remain, it is not properly suited to carry out its task, and the handing over of its functions to the Revenue is long overdue?

Lord Hunt of Kings Heath: My Lords, I am not going down that speculative route for the reasons that I have already given. I certainly accept, as my right honourable friend the Prime Minister said in another place, that some major issues around the structure, policy and operations of the CSA warrant the most serious consideration. I pay tribute to the Select Committee, chaired by the noble Lord, Lord Kirkwood, which made interesting proposals for CSA reform. We have responded, but we are taking into account its recommendations in relation to the current review.

Lord Stoddart of Swindon: My Lords, before final decisions are made, will the noble Lord and his colleagues read this House's debates on the Child Support Bill, way back in the 1990s? Will he read the contributions made by the late Earl Russell and the late Lord Houghton, both experts in the matter, who predicted—as, incidentally, did I—the shambles that the Child Support Agency has become?

Lord Hunt of Kings Heath: My Lords, I have looked at some of the debates, but I am happy to look at them again. There is no question that it was a huge undertaking, but it is worth pointing out that the situation before the Child Support Agency was not entirely a happy one. I quote from the White Paper, Children Come First, produced by the previous government, which, commenting on the then court-based system, stated:
	"The present system of maintenance is unnecessarily fragmented, uncertain in its results, slow and ineffective".
	For all the problems that the Child Support Agency faces, none the less it is producing £600 million a year. We should not underestimate that.

Business

Lord Grocott: My Lords, with permission, my noble friend Lord Hunt will repeat a Statement on the welfare reform Green Paper later this afternoon at a convenient time after 3.30 pm.

European Union (Accessions) Bill

Report received.

Racial and Religious Hatred Bill

Read a third time.
	Schedule [Hatred against persons on religious grounds]:

Lord Hylton: moved Amendment No. 1:
	Page 7, line 2, at end insert—
	"(2) For the avoidance of doubt, no offence is committed on the sole ground that a person has read aloud from the scriptures traditionally held sacred by one of the main world religions within a place of worship or at a private meeting."

Lord Hylton: My Lords, I hope very much that this amendment is a model of what a Third Reading amendment should be. It is for the avoidance of doubt and is intended to clear up an uncertainty in the Bill. It does not seek to reopen matters already decided. Furthermore, it has been tightly and narrowly drafted with the help of the Public Bill Office. It protects readings from the scriptures held sacred by one or other of the main world religions, provided that the reading takes place inside a place of worship or at a private meeting—for example, in a house or a school. Outdoor meetings are deliberately not covered.
	We all know that violent and bloodthirsty passages can be found in many ancient scriptures written hundreds or even thousands of years ago. Today's audiences should use their critical judgment in applying such texts to the actual contemporary circumstances. They should perhaps give greater weight to the injunction to,
	"love your neighbour as yourself",
	than to,
	"an eye for an eye".
	At all events, the amendment gives no protection to comments or sermons based on texts. My amendment has the useful, practical purpose of reducing the scope for frivolous or malicious complaints. These could well lead to police investigations of possible incitement to religious hatred and to long considerations of whether to prosecute. On all these grounds, I trust that the amendment will find favour with the Government and with your Lordships. I beg to move.

Lord Campbell of Alloway: My Lords, very briefly, I say with the greatest respect to the noble Lord that although the amendment was tabled "for the avoidance of doubt", it is the progenitor of inconsistency. Texts from scriptures of some main religions are manifestations in themselves of religious hatred and exhortations to take unlawful action on that account. What is the intention—and intention now lies at the root of the Bill—of reading out these texts,
	"within a place of worship or at a private meeting",
	if other than to stir up religious hatred? Is there not some general doubt, in any event, whether matters covered by this complex Bill will not find their way on to a website in Holland and tend to exacerbate religious strife in this country? These are questions that have not been considered in the debate. I shall abstain, of course, but I respectfully suggest that they are worthy of consideration.

Lord Lester of Herne Hill: My Lords, I perfectly understand the reasons why the noble Lord, Lord Hylton, has introduced this amendment. I do not think that there is the slightest doubt that no offence would be committed under the Bill as amended in Committee in this House or, indeed, under the Bill in its original form. As the House will hear shortly from the Minister, for reasons that she and others may explain, before this Bill finally becomes law it will be in a form which I am confident would make this amendment in any event otiose—as lawyers like to say—or unnecessary.
	The amendment also gives rise to some problems, which we do not need to debate now, about what is meant by "the main world religions" and what happens to those that are the world's minor religions or other religions. There are problems about discrimination between religions, the definitions of religions and so on. While we all understand the aim of the amendment, I think that I can reassure the House—as one of the architects of what we did in Committee—that it is not necessary for the avoidance of any doubt. If there were any, I am sure that it would be taken care of in other ways before the Bill received Royal Assent.

The Lord Bishop of Manchester: My Lords, I have the utmost sympathy with the intention behind the amendment of the noble Lord, Lord Hylton. The truth is, though, that we have come a very long way towards achieving a balance between protection of people from behaviour motivated by hatred and the preservation of freedom of expression in religious matters.
	Over the months, the Government have taken seriously the concerns expressed from many quarters—sometimes perhaps a bit late in the day and maybe even under occasional duress. Nevertheless, in my view, the presently amended form of the Bill before us today paves the way for a satisfactory resolution of outstanding issues. I shall be very interested to hear the Minister's response to the amendment, but I rather pray that the noble Lord, Lord Hylton, will not wish to test the view of the House.

Lord Plant of Highfield: My Lords, I am not entirely clear when and if it will be appropriate to speak about the Bill more generally, picking up the point made by the right reverend Prelate and the noble Lord, Lord Lester. I very much agree with the points that they made. At Second Reading, I made it clear that I did not believe that the measure was compatible with the values of a free and tolerant society and I put my name to the group of amendments to which the noble Lord, Lord Lester, has referred and which, with all due respect to the noble Lord, Lord Hylton, cover the issues to which he wants to draw the House's attention this afternoon.
	As I understand it, there have been discussions involving my right honourable friend the Home Secretary and my noble friend the Minister of State, and a good deal of common ground has been found. I very much welcome that and hope that it will be brought to fruition. I may be misinformed but I understand that the opposition Front Benches in another place have reservations about the degree of common ground that has been found. If that is so, it is extremely regrettable because there is a big danger of making the best the enemy of the good in this kind of case.
	The Bill, as it now exists after amendment in Committee, effectively covers the points made by the noble Lord, Lord Hylton. I think it is a much better Bill than the one that came here, yet that was the Government's ideal Bill. The present Bill, even with this common ground established, will no longer be the Government's ideal Bill; it will be their compromise Bill. There are dangers in opposition Members in another place seeking to undermine the degree of common ground that has been arrived at and, as I said, making the best the enemy of the good.
	Given the political pressures in another place, we do not want the Government suddenly deciding to reintroduce the original Bill rather than accepting and going with what seems to me the fair compromise which has, I understand, been agreed. In my judgment—backed up by the much more expert noble Lord, Lord Lester of Herne Hill—that compromise would underpin a good outcome and show what the House of Lords is capable of doing in terms not of trying to sink a Bill which is a manifesto commitment but of trying to challenge the Government and revise a Bill in a very constructive way.

Baroness Scotland of Asthal: My Lords, I say to the noble Lord, Lord Hylton, that unfortunately I very much agree with the statements made by other noble Lords. I agree with what was said by the noble Lord, Lord Lester, my noble friend Lord Plant, the right reverend Prelate and, indeed, the noble Lord, Lord Campbell of Alloway—this is not the right amendment. I reassure the noble Lord that I fully appreciate the concern that has caused him to proceed with tabling the amendment, but I do not believe that it is necessary to amend the Bill in the way that he suggests—not least because of the amendments that were made earlier.
	As we have said previously, the Bill is about stirring up hatred. It is difficult to see how simply reading from a sacred text would ever, by itself, be considered an action that would stir up hatred. The only circumstances that I can envisage where the reading out of a sacred text could possibly fall within the scope of an offence would be if such a reading were accompanied by actions or words which are already adequately covered by the freedom of expression exemption currently in the Bill at paragraph 29J. The noble Lord, Lord Lester, the architect of these provisions, is therefore quite right in saying that it would be unnecessary, because the Bill exempts matters such as criticism and expressions of antipathy towards a particular religious belief.
	When we reach the Motion that the Bill do now pass, I will report to the House, as I undertook to do on Report, the outcome of our strenuous deliberations, which have engaged all Benches—the Bishops' Bench, Her Majesty's loyal Opposition, the Liberal Democrats and ourselves—to try to come to an accommodation. It is clear that the noble Lord, Lord Hylton, is seeking to underline the consensus which we all arrived at—that we need to do two things. We need to protect people from the aberrant and quite disastrous effects of religious hatred but, by the same terms, not put any improper restriction on our freedom of speech and of expression. When we come to the next stage, I will seek to outline the Government's response to those issues.

Lord Hylton: My Lords, I thank noble Lords who have spoken to this amendment. I appreciate the improvements that have already been made to the Bill, particularly in the matter of intention and freedom of expression. I acknowledge that my amendment may well be deficient as regards definitions. I look forward to hearing the statement that the Minister has promised. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Scotland of Asthal: My Lords, I beg to move that this Bill do now pass.
	I should like to take this opportunity to explain to the House the basis on which we propose that the matter should go forward, particularly bearing in mind that, pursuant to the discussion we had on Report, it was hoped that there would be amendments that we could move on Third Reading. That has not proved possible.
	At Report, on 8 November, I said that we would continue to try to build a consensus on the Bill that balanced the concerns which many noble Lords had clearly expressed about freedom of expression with a need to produce a viable and effective offence of incitement to religious hatred. It seemed to me then, as I said earlier, and it seems to me now that, in this House, such a consensus does exist: first, that we need to protect people, as I have just indicated; but, secondly, that we also need to protect our freedom of expression and freedom of speech. I believe that there is still a possibility that that consensus will be arrived at. However, it has not been possible to bring forward agreed amendments to this House. I confess that that is a source of great regret and acute disappointment to me.
	A great deal of thought has been given to how that consensus could be achieved on this Bill. There have been discussions with key Members of this House and another place, not least the noble Lords, Lord Lester of Herne Hill and Lord Hunt. I thank them for their diligence and hard work in those efforts. The Government have made considerable efforts to try to meet the concerns expressed. I will leave it to the noble Lords, Lord Lester and Lord Hunt, to explain their position on these matters. It is, however, only right and fair that I set out to your Lordships the Government's position during those negotiations. It remains our position.
	We are prepared to accept that the incitement to religious hatred offence should be separate from the existing racial offence, and that it should form a new schedule to the Public Order Act 1986. That is, we accept the new architecture. We propose to insert a subjective recklessness test into the offence, clarifying the intent provisions. We will put forward a revised version of the freedom of expression wording for the sake of complete clarity on this issue. It will specifically state that proselytising, discussion, debate and criticism—including the use of abusive and insulting language and ridicule—of religion and religious practices will not be caught by the offence unless a person also intends to stir up hatred against a group of people, or is reckless as to whether it would thereby be stirred up. We have always contended that that is the Government's intention. Finally, we will be seeking to restore "abusive and insulting" to the words and behaviour that make out the offence. I hope that, given the full package of measures that we are proposing, this will not be something that will cause noble Lords to disagree.
	I must again thank noble Lords for their considered contributions throughout the progress of the Bill through this Chamber. I recognise that the concerns expressed arise from a real desire to ensure that the treasured freedoms of this country are not eroded. On these Benches, we have upheld and expressed that desire, so there is consensus on that issue. I am absolutely committed to those aims and to ensuring that we protect our most vulnerable communities from having hatred stirred up against them by those who do not share these values. I thank those on this Bench who have arduously and consistently supported those aims.
	Moved, That the Bill do now pass.—(Baroness Scotland of Asthal.)

Lord Hunt of Wirral: My Lords, as so often during the long life of these proposals, I speak not in anger but in sorrow. I hope this will not be taken as a partisan point, but our starting point for this latest journey was not very promising. I am reminded of the old joke where one man asks another for directions and, after a pause, his interlocutor begins by saying, "Well, you wouldn't want to be starting from here". Unfortunately, Ministers made a fundamental mistake by attempting to amend the Public Order Act 1986 by effectively adding "religious" to "racial" throughout the existing offences. That misjudged attempt to equate religion with race started this entire debate off on the wrong track. It has taken a lot of effort, courage and patience, not least on the part of Ministers, to get the debate on to the right track. I readily pay tribute to Ministers for their willingness to listen and to restructure this fundamental aspect of their original approach.
	As the Minister pointed out, as soon as Ministers agreed that the proposed new offence of inciting religious hatred should appear separately as a new schedule to the 1986 Act, the possibility of reaching a consensus was created. I thank the noble Lord, Lord Hylton, for the short debate we have just had on his amendment which reinforces that point. Suddenly, it became possible to fine-tune the religious hatred offence without also reopening the 1986 settlement on racial hatred. At a stroke, a broad consensus here and in another place seemed not only attainable in principle, but tantalisingly close in practice. As we return this rewritten Bill to the other place, I fervently hope that its Members will think again and endorse our view that a person's race and his or her religion are quite different qualities. Race is innate. In a liberal democracy, it must be an article, if not of faith, then surely of the fundamental foundations of our political discourse, that beliefs are a matter of individual choice. Adherence to a faith, belief or set of beliefs is about ideas and should not be elevated in law to a higher plane than any other idea or ideas. That is why on 25 October this House made its position very clear indeed. The Bill in its original form was overwhelmingly rejected and an amended version was adopted, with support from every part of this House. That, I believe, was the House of Lords at its best, in its traditional role of amending and improving legislation and defending civil liberties. Since then some very important and detailed discussions have taken place.
	I thought it might be helpful if I set out my response to the noble Baroness. Just as Ministers conceded ground and accepted both our amended structure and substantive aspects of the revised Bill, so we on these Benches have moved too. We did so at the outset, by conceding the principle that any such Bill should be passed at all. Although we on these Benches certainly agree that there should be no right to stir up hatred of people, on the whole we continue to believe that the existing law covers this perfectly adequately. That was underlined by the recent travails of Sir Iqbal Sacranie, the head of the Muslim Council of Britain, who was apparently investigated by the Metropolitan Police after expressing negative views about homosexuality.
	We really must do everything we can to ensure that this new legislation is not open to abuse. It must not open the floodgates to a mass of frivolous complaints, much wasting of police time and pointless inconvenience and worry for those who express trenchant views about religion. However, as the great Rab Butler once said, politics is the art of the possible.
	The Labour Party won the last election and committed itself to legislate in this area—and we all remember the terms of the Labour manifesto. During our meetings with Ministers, I confirm that it soon became clear we were all seeking to achieve the same objective; namely, absolute clarity in the Bill that any new offence should capture the stirring-up of hatred against people and not beliefs or practices. Throughout there was a lot of good will on all sides. Shortly before Christmas, it seemed that that good will might manifest itself in a more concrete form in the shape of an agreement on the Bill. Alas that did not prove possible. The concessions offered by Ministers were by no means perfect, but they were a major improvement on the original Bill. I should like to pay tribute to everyone involved because there was no shortage of constructive contributions. The noble Lord, Lord Lester, and I believe strongly that this matter is above party politics, and it was treated with the seriousness it deserves. Between us we constructed a bridge, both halves of which reached almost halfway across the chasm that had existed between the two sides. Unfortunately, that is never quite good enough.
	I should like to pay particular tribute to the noble Baroness, Lady Scotland, who has been unfailingly courteous and patient. I am very grateful to the noble Lord, Lord Lester, whose wise counsel never faltered. I pay tribute also to colleagues in another place, especially Dominic Grieve, but also Mark Oaten and the Home Secretary, Charles Clarke. All have combined an adherence to principle with a genuine willingness to engage and to compromise where possible. The sticking points, however, soon became all too apparent.
	In order to allow ideas and free debate to flourish, it is essential that we should retain our right to criticise—even as hateful—beliefs and practices of every kind, be they secular or religious. That means retaining the right to cause a sense of insult, and also to say things that might seem abusive. I am afraid that that is why those two words, "abusive" and, especially, "insulting", even when clearly confined to the offence of stirring up hatred against people, continue to cause these Benches such difficulties. They involve the creation of a new criminal offence that could result in people being imprisoned through causing insult alone in this controversial area of religion and politics. That is the rock on which agreement foundered.
	There will be a chilling effect from this legislation—there will inevitably be self-censorship—and the burden of minimising that will fall heavily on the freedom of expression clause in this Bill. The inclusion of the so-called "PEN amendment" in the amended Bill demonstrates just how seriously we in this House take our responsibilities for protecting freedom of expression.
	In conclusion, Members of this House have walked a long and winding road together and I pay tribute to all noble Lords who have participated in the debate. The end of the road seems at last in sight. I say without shame, embarrassment or false modesty that this House has improved the Bill immeasurably. We are sending back to the other place a far better Bill than the one that it handed to us a few months ago. I hope that the other place agrees.

Lord Lester of Herne Hill: My Lords, I thank the Minister for her generous remarks and helpful explanation. On a matter as sensitive as this, it is important to avoid party-political posturing and concentrate on substance. I pay tribute to the Home Secretary and the Minister for the open-minded and honourable way in which they have conducted negotiations with the noble Lord, Lord Hunt of Wirral, with me and with others on behalf of our parties and beyond.
	We welcome the fair compromise reached with the Home Secretary on further amendments to the Bill. Like the Minister, we regret that it is not possible for the changes to be made in this House today. That is regrettable because the Bill will leave the House in an imperfect state. The amendments that we crafted in our negotiations would improve those that I successfully moved in Committee, with the support of the noble Lords, Lord Plant and Lord Hunt, the noble and right reverend Lord, Lord Carey, and the majority of the House, without destroying the substance of the offences or undermining existing public order legislation, which for all the main offences uses the words "threatening, abusive or insulting".
	Like the Government, we wish that it had been possible for this House, which has played such an important role in including essential safeguards in the Bill, properly to complete the work before sending the Bill back to the other place. I shall not go into the reasons why not; that would show a lack of tact and diplomacy with the other place. If, as we hope, the amendments are adopted in the other place, those changes will not wreck this manifesto Bill. Together with the remedies for religious discrimination in the Equality Bill, they will achieve the Government's legitimate aim of giving legal protection to vulnerable religious as well as ethnic minorities against both incitement to hatred and religious and racial discrimination.
	The amendments will also meet another central aim of so many from all sides of the House: to include clear safeguards protecting the practical enjoyment of freedom of expression of writers, publishers, broadcasters and entertainers, and of the public, against the chilling effects of a vague and over-broad criminal law. The declaratory statements proposed to be placed in the Bill would make it clear that no offence would be committed for anything done by way of discussion or debate on religion, religious belief or religious practice; or criticising, expressing antipathy towards, abusing, insulting or ridiculing any religion, religious belief or practice. That would be a unique addition to the criminal code and is supported by English PEN.
	We greatly welcome the Minister's statement, as I understand it, that the Home Secretary will table those amendments. I wish that I could claim them as my own and as a famous Liberal Democrat victory, as I believe them to be, but I understand that he will table those amendments in the other place, where we hope that they will be accepted.
	If any are minded to wreck the Bill in the form in which it is now proposed, I ask them to reflect not only on whether that would be in accordance with constitutional convention but whether they would wish to take the position that it should not be a crime to use abusive or insulting words deliberately to stir up hatred against Muslims as Muslims, in the way in which it has for 40 years been a crime deliberately to stir up hatred against black people or Jews because of the colour of their skin or their Jewish ethnicity. I suggest that that is not an attractive position for a modern political party to espouse. If the government amendments are included in the Bill when it returns to this House, we on these Benches will accept them.
	Finally, we hope that the Home Secretary will be able and willing speedily to secure the equal protection of the law by abolishing the archaic and outmoded crime of blasphemy protecting Christianity against insult and abuse. The noble Lord, Lord Hunt of Wirral, has just spoken about the importance that he and his party attach to leaving out the words "insulting" and "abusive" from the definition of the offence. I had not realised that he would say that, but perhaps I may explain why that is wrong. It is completely wrong because we have taken the words "insulting" and "abusive" out in the free speech guarantee. Therefore, they need to go back in because this is part of the family of all public order offences dealing with hatred against groups of people—for example, Muslims as Muslims—in the way that they deal with Jews as Jews. That is misguided; although I know that there are others in my party as well as the noble Lord's who take a different view. I do not believe that that is a coherent position.

The Lord Bishop of Manchester: My Lords, crucial points have already been made in this debate. I want to express gratitude from these Benches for the way in which the Minister has included so many of us in the discussions that have been held in framing what we have before us. I very much welcome many of the remarks made by the noble Lord, Lord Lester. As a bishop in Manchester, I am well aware of the great difficulties that Muslims and Jews face in all these complex matters. I can speak probably on behalf of my colleagues in saying that we are very open to further discussion on all these issues. Indeed, the reference that he made to blasphemy, while obviously it would not be appropriate for me to say any more than that we would welcome further discussion on that matter, nevertheless is a point which I make with sincerity to him.
	In her opening remarks, the Minister referred to some of the points that she had made in the debate on 8 November. Perhaps I may briefly from these Benches, first, welcome the creation of a separate part within the Public Order Act devoted to religious hatred. As has already been said today, that makes it clearer and safer to treat religious hatred on its own terms, and not simply to read across the racial hatred provisions, which is most unsatisfactory. So I welcome that.
	Secondly, from these Benches we approve the general thrust of the exemptions in paragraph 29J of the schedule. The schedule embraces the crucial activities that ought to be protected; that is, discussion, criticism, persuading people to change their religious beliefs or practices, antipathy, ridicule and even abuse and insult, so long as they are directed against beliefs and practices rather than people. We also regard it as important that the term "discussion" in paragraph 29J should be held to cover the delivery of religious teaching and preaching where assertions are properly made with a sense of conviction and authority, and not merely as interesting hypotheses or helpful suggestions. I would welcome an assurance from the Minister on that matter.
	Thirdly, we are relieved that the amendment has removed the likely limb of the offence. We welcome the reinstatement of the words "abusive" and "insulting" as terms that protect vulnerable people more adequately. It has already been said that we are not quite in the position today that we might all have liked. Nevertheless, the progress of the Bill has demonstrated one of many occasions when people from all sides of the House have engaged in a most constructive manner. We are that much closer to a position where most of us would like to be in addressing an extremely important issue facing communities in this country.

Lord Avebury: My Lords, the right reverend Prelate has said that we are not in the position we would like to be, and I would say only that if the Bill had not gone into a secret cabal and we had had the discussion on the Floor of the House, we would probably have reached a much better position. I object to the way this matter has been handled. As the noble Baroness is aware, I have not been privy to the discussions that have taken place between the Home Secretary, my noble friend and the noble Lord, Lord Hunt.
	Over many years I was involved in trying to secure legislation on similar lines to those we are now discussing. In their wisdom, noble Lords sent a Bill that I introduced to a Select Committee where it was considered for a whole year. It came back to the Floor of the House and was there further discussed. On those occasions we had every opportunity to talk about the matters that have preoccupied us during the proceedings on this Bill, particularly the case made by the noble Lord, Lord Hunt, and others for separating incitement to religious hatred from incitement to racial hatred. I persist in the view that that is a mistake. Aside from anything else, when the courts come to deal with offences of this kind, they will have to say that Parliament intended something completely different from what is already set out in the Public Order Act 1986. If we had continued on the original lines, we would have prevented that confusion arising.
	This is not a matter which has come up recently, as implied by the noble Lord, Lord Hunt. It was considered by the Law Commission as long ago as 1985. At the time the commission said that although incitement to religious hatred was not a proximate matter for Parliament to consider, if it ever became so, it would be a simple matter to legislate by adding religion to Part III of the Public Order Act 1986. That was the genesis of the proposal. It was picked up by the Government in the NIA Act and further developed in the Select Committee. I remain convinced that it would have been preferable to continue along those lines. However, since we decided not to do that, it was incumbent on the Government to introduce their proposals in the light of day, not to discuss them with Front-Benchers behind the scenes. That is not a way to legislate. I am very disappointed that we do not have proposals before us showing how the Government intend to handle this matter when it is sent to the other place.

Baroness Scotland of Asthal: My Lords, in moving the Motion that the Bill do now pass, I should say to the noble Lord that all this will be passed over to the other place, which will be able to deal with it. For procedural reasons we were not in a position to table amendments in this House, so noble Lords have not had that opportunity. But all this will be dealt with in other place.
	We should now allow the Bill safely to go on its way.

Baroness O'Cathain: My Lords, I will not prolong our proceedings for longer than one minute. Last year I tabled amendments to delete the previous government proposal on a religious hatred offence in the Serious Organised Crime and Police Bill. Like many noble Lords, and in concert with so many others in the country who oppose this Bill in principle, I would have preferred not to have had it. The creation of a religious hatred offence in any form is fraught with difficulty, as we have discussed many times. However, the Government are determined and in that light I support the amendments passed by this House last October, introducing substantial safeguards for free speech and religious freedom.
	Despite the fact that we have reached a compromise, the Government remain obdurate. I understand that, during negotiations held over recent weeks, the Government's idea of a compromise is to propose amendments that achieve the same results we saw in the original Bill, but using slightly different wording. Is this what the Government always aim to achieve when they offer consultation and negotiations?
	I am very glad my own party has remained firm. Together with my noble friend Lord Hunt I hope we will continue to do so if this Bill comes back here changed by the Government in another place, ignoring the amendment that was passed, I remind your Lordships, with a majority of 90 in this House.

Lord Campbell of Alloway: My Lords, I object to the read-across, the point taken by the right reverend Prelate and taken by me when I first divided the House on this matter. Therefore I shall abstain, not only for that reason, but for other reasons I have mentioned.

Lord Mackay of Clashfern: My Lords, in my view the noble Baroness has conducted this matter with great skill and devotion. If one is examining detail, which is what was being examined in the later stages of the Bill's progress through this House, one cannot do so as if it were the whole House. One has to make an arrangement for people to come along and express their views, and those who did so are to be thanked on our behalf for taking part in the discussions. As the noble Baroness has said, we shall all have a chance to see what is decided in the other place, and also to see how these decisions came to be reached in the other place, in due course. For my part, I am content to wait for that, in the mean time thanking those who have taken part for the progress that has so far been made.
	On Question, Bill passed, and returned to the Commons with amendments.

Welfare Reform Green Paper

Lord Hunt of Kings Heath: My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend in another place.
	"With permission, Mr Speaker, I should like to make a Statement on the Government's Green Paper, A new deal for welfare: Empowering people to work. After eight years of a Labour Government there are now 2.3 million more people in work. There are 1 million fewer people on benefits. Two million children and almost 2 million pensioners have been helped to escape from living on the poverty line.
	"Since 1997 we have worked to build a modern active welfare state. Through the minimum wage and tax credits we have made work pay. Through record investment in the New Deal and Jobcentre Plus we are creating an enabling welfare state that responds to the needs of individuals and matches rights with responsibilities.
	"All this contrasts with the legacy of the party opposite. Eighteen years of economic mismanagement and welfare failure had left 3 million more people of working age on benefit. Unemployment went up 50 per cent. The numbers claiming incapacity benefit trebled as it was used to hide long-term unemployment. Three million children were left to live in poverty. It is time we brought this shameful legacy of Thatcherism to an end.
	"That is why ensuring the right to work should always be one of the fundamental responsibilities of any modern government. Work is good for you. Work can be the bedrock of personal responsibility, dignity and well-being. The challenge we face today is how to build a modern welfare state that allows people to exercise this right when our national economy is changing more rapidly than at any time since the industrial revolution.
	"And it is not only our economy that is changing. We are confronted by a rapidly ageing society and a falling birth rate. Soon, and for the first time in our history, there will be more people over the age of 80 than under the age of five. So our welfare state must continue to adapt to meet these challenges.
	"We have set ourselves the ambitious goal of an 80 per cent employment rate. Its achievement will be critical for the nation; for individuals; for families and communities; for wealth creation; for economic competitiveness; and for social justice. I do not underestimate the scale of such a challenge. It will mean a million fewer claiming incapacity benefit, a million more older people in work and 300,000 lone parents off benefit.
	"The proposals we are putting before the House today will make a significant contribution to realising this ambition.
	"Today's Green Paper builds on reforms we have already introduced to remove the remaining barriers that hold people back from work. Our approach is based on a belief in an active welfare state that balances rights with responsibilities; that provides work for those who can, support for those who can't. Our proposals will be fair to claimants and fair to taxpayers.
	"We will reform incapacity benefit. Nine out of 10 people who come on to incapacity benefit expect to get back into work. Yet if you have been on incapacity benefit for more than two years, you are more likely to retire or die than ever get another job. This cannot be right.
	"Also, the circumstances of claimants are changing. No longer is incapacity benefit associated only with Britain's industrial heartlands. There are more people on incapacity benefits in the south-east than in the north-east and there are at least 150,000 claimants in every region. A third of new claimants now cite mental health problems as the main reason for coming on-to the benefit, compared with a fifth in 1997. It is an issue affecting all of the country, not just parts of it.
	"We have already made a start. The combination of increased support through the New Deal for Disabled People, together with an extension of rights through the Disability Discrimination Act, has started to improve the opportunities available to disabled people. Building on these reforms, our strategy is threefold. We will act to reduce the number of new claimants. We will provide greater help for those on the benefit to return to work. For the most severely sick and disabled, we will provide greater support.
	"The Green Paper sets out proposals to improve workplace health. GPs have an important role to play in helping to ensure that their patients are able to work. So we will test the impact of employment advisers in GP surgeries. The first of these will be in place within a month. We will work with GPs and primary care professionals to support individuals to remain in work or return to work. And we will reform statutory sick pay to simplify it and ensure that it helps people to stay in work.
	"We will reform the medical test, which acts as the gateway to incapacity benefit. The assessment process must ensure that it is focused on a person's potential capability and capacity to engage in the labour market rather than just their incapacity.
	"Central to this will be the reform of the 'exempt' category within the existing benefit structure. We must ensure that it no longer writes people off simply because they have a particular condition. For example, if you are blind the current benefit structure assumes you will always be incapable of work. This is wrong and unfair. We will correct this by reforming the criteria for exemption.
	"In future, all claimants will be assessed not just to determine their eligibility for benefit but also their capability for work. I recognise the sensitivity and importance of getting this crucial aspect of the reforms right and we will consult on this and other issues to ensure that we take a fair and equitable approach. We will also review the mental health component of the test.
	"In addition to reforming the gateway, we will reform the benefit itself. From 2008, new claimants will receive an employment and support allowance, replacing the current system of incapacity benefits. The perverse incentives in the current system will be removed. Unlike today, no one will be eligible for the full benefit until they have completed the medical assessment. Claimants will no longer receive more the longer they claim. For those who are 'exempt', the new benefit will be paid at a higher rate than now. As now, they will be able to take up support if they want to, but it will not be a condition of their benefit.
	"However, for the vast majority—those who will not be exempt—the new benefit will have a clear framework of rights and responsibilities. They will be required to attend regular interviews, complete action plans and, according to evidence about what works and the availability of future resources, engage in work-related activity.
	"The level of benefit they receive will be above the current long-term rate of incapacity benefit. But those refusing to engage in the help and support offered could see their benefit reduced progressively in stages to the level of jobseekers' allowance. Existing claimants will remain on their current benefit level. Over the next few years we will ask existing claimants to attend a work-focused interview and agree an action plan to take steps to return to work. Those who do not engage will, as now, potentially see their benefit reduced. This process of re-engagement has already started.
	"But we can only ask more of people if the help and support they need is in place. Our Pathways to Work pilots—combining employment and health support—have already shown significant success in getting people off benefit and into employment.
	"I can today confirm that over the next two years we will be investing a further £360 million—from within my existing resources—to extend Pathways to Work to every part of Britain by 2008. For the first time, as a result of this investment, we will be bringing new hope and opportunity to some of the most disadvantaged members of our community.
	"I am confident that the reforms outlined today will move us significantly closer to our goal of an 80 per cent employment rate and the realisation of that vision. I believe that if we take the measures that I have outlined today and work together with health professionals, local authorities and employers, we can get a million people off incapacity benefit within a decade. In doing so we could ultimately save up to £7 billion a year for taxpayers. That should be the scale of our ambition—nothing less.
	"We need to do more to help lone parents to get back into work. Today, 56 per cent of lone parents are back in work compared with 45 per cent eight years ago. We know that many lone parents want to work but face barriers to returning to the workplace. This is why we have extended support through the new deals and our 10-year childcare strategy.
	"Building on these reforms, we will increase the number of interviews lone parents are expected to attend. We will require those whose youngest child is at least 11 to attend interviews every three months, alongside piloting a new premium so that lone parents are better off if they take serious steps towards preparing for work. Those with younger children will have to attend twice a year, compared to once a year now.
	"We will pilot more intensive support for lone parents during the first year of their claim and we will also simplify the rules so that lone parents are not penalised for joining work experience programmes.
	"A key part of our strategy is to ensure that many more older people are able to remain in work for longer. I have spoken about the challenges of an ageing society. The Green Paper sets out proposals to extend all aspects of the New Deal 25-plus to the over-50s. We will improve the back-to-work support for JSA claimants and their partners who are over 50, and work with employers to extend flexible working opportunities to older workers.
	"The Green Paper also sets out our plans to simplify the existing housing benefit system to improve work incentives and encourage personal responsibility for housing choices.
	"The Green Paper sets out a challenging goal—one which central government, acting on their own, cannot meet. Instead, we will need to engage those in the public, private and voluntary sectors in a new mission to improve employment opportunities in our disadvantaged areas.
	"Moreover, there is a crucial role for local community leaders. Tackling worklessness can be achieved only if we work with partners in the local community—including the private and voluntary sectors—and harness their energy and commitment to deliver real progress. Some of our biggest cities in particular have a disproportionate number of benefit claimants.
	"I am committed to opening a new chapter in the evolution of our modern welfare state. Local leaders will be asked to bring together local employment, training and health providers to help tackle concentrations of worklessness. They will be able to ask for greater flexibilities over the use of existing funding.
	"I believe that local communities should share in the benefits of reducing the number of claimants. So for successful bids, I will provide seedcorn funding, and a financial reward for meeting their aims.
	"The publication of our proposals today will start a three-month consultation process. We will engage and listen carefully to all who respond; to everyone who shares our commitment to improving the employment prospects of those currently living on benefit.
	"My vision, therefore, is of a modern welfare state that responds to individual need, balances rights with responsibilities and invests for the long term. The Government stand ready to make this investment in our people and our country. That is why I commend the Green Paper to the House".
	My Lords, that concludes the Statement.

Lord Skelmersdale: My Lords, I thank the Minister for repeating the Statement. I am grateful, too, for his invitation to discuss the Green Paper next week; I hope I will be able to attend.
	Despite the predictable spin with which the Statement starts, both the Minister and the Secretary of State must appreciate that it is made against the background of an economy that is going rapidly downhill. Not only are there 1,528,000 unemployed on the Government's favoured register, there are 909,000 claimants for 606,000 vacancies.
	We further know—the Government have told us often enough—that 1 million people on incapacity benefit want to work. I am afraid that the figures just do not add up. That said, the Government are right to seek to encourage, not force, those on IB who are able to work to re-enter the employment market where it exists. The question is, how many of these 1 million can realistically be expected to find work? Even though I have not seen the Green Paper, I welcome the thrust of the Statement although I question whether the Government can actually deliver when we do not know whether claimants genuinely expect to be able to return to gainful employment or whether they are just expressing a vague aspiration. Even if the expectation is real, are they able to work? If so, in what jobs, and where?
	I noted that the highest figures for people on IB are in areas with the lowest opportunity of job availability. The point is that of the 2.7 million people on incapacity benefit or any replacement benefit, a proportion will be so incapacitated healthwise that, even if they want to work, no one could realistically expect an employer to take them on. Others will have been out of work so long that, although in theory they want to work, they have lost what I call that "get up and go" factor that is so important. Yet others—1.1 million, I believe—of the total caseload are claiming because of mental and behavioural disorders—the Statement mentions that in part—which are so notoriously difficult to treat. What is the answer to that? The Statement hints at sanctions, as there are for those on jobseeker's allowance, but is reduction of benefit for people who are by definition among the least well off really appropriate? Another suggestion, which has been around for some time, is to have employment advisers in GP surgeries. That is all very well, but we need to encourage people back into work not force them.
	Your Lordships might feel that all this has nothing to do with today's Statement, but it does. From the figures that we have been given, roughly a third of new claimants will want to return to work, so what we know of existing claimants is indeed pertinent for the future. The Government ought to be asking themselves—and this being an announcement of a Green Paper rather than a White Paper, their consultees—whether the whole system of six-month statutory sick pay followed by almost automatic transfer to a long-term benefit is the right one. I note that the Statement seems to throw some doubt on that.
	Most important of all, why is there so little medical intervention? I accept that the GP is the gateway to both benefits. One would hope that a sick note is based on the GP's assessment of a person's medical condition, not a need for the latter to get rid of the patient so that he can spend as little time as possible on the case, in order that he—the GP—can meet the Government's target of an average of seven minutes per patient to spend more time on a more acute medical problem.
	What about the medical ethics of questioning the doctor's judgment? The state, as the basic support system for those of our citizens in need, should not allow people who genuinely require our support to lose the social security help that is theirs by right. It is the right of people to seek help from the state in their hour of need. I hope that that is the basic concept of all political parties. But—and it is a big but—claimants have to play their part. After all, with rights go responsibilities. Alas, some of our citizens forget that. It is anathema that some people should be allowed by the system to go on and on claiming when they are capable of at least some work even if it means retraining. Again, I agree with the Government about that.
	However, there is no doubt that some are allowed to carry on because of the lack and frequency of medical intervention. If, as the Statement says, people are more likely to die or retire after two years on benefit than they are to be re-employed, what is the average length of time before a new claimant sees a doctor? Even more important, how long is it, again on average, before an existing claimant sees a medic to review his claim? Can it really be the three to five years that I have been told about? That must, must change under the new arrangements.
	I do not expect the Minister to answer all those questions today, but I would be grateful for as many answers as he can give me by letter in due course because they are just as relevant to the new employment and support allowance as they are to the current invalidity benefit. Having said all that, I repeat what I said at the beginning: I welcome the thrust of the Statement, but I have my doubts.

Lord Addington: My Lords, this is probably overdue—something that we have been promised for a long time. I hope that it is the start of a very constructive process. To mirror what the noble Lord, Lord Skelmersdale, said, the general thrust seems to be a good one, based on a degree of consensus. It hints at the fact that we shall have the individual placed at the heart of the system and that we shall look at the individual need, treating individuals as units unto themselves and their own circumstances. Unfortunately, that is not a resource-light approach. A one-size-fits-all thing is a very bureaucratic and comfortable system—tick the right box, get the right answer, and you are off and running.
	GPs were mentioned in the Statement, which is quite right; GPs will be a vitally important part of getting the process right. However, the term "general practitioner" should give rise to a degree of caution in everybody. They are not experts; they are called on to deal with an extremely wide range of problems. What sort of support has been built in here, and what sort of formal link has been built in between health and the Minister's department? Indeed, the Minister is probably historically very well based to assess the level of that link. The fact of the matter is that without such support, much of what we are talking about here—much of the aspirational stuff—is going to fail. You need expert support and intervention early on.
	Mental health is one of the biggest areas of growth. Can we realistically expect a GP, who has a wide-ranging generalist job to do, to be an expert in mental health? The answer is, quite simply, no. We now bring physiotherapists into most practices. Under the old idea of IB for a worker whose back has seized up or who has a repetitive strain injury to a hand, a physiotherapist is the right person to help that person back into work and to give support through that process. Does the Minister see a situation in which that sort of help will be provided for those in the mental health system? If it is not, you have already created a hole in the structure. You must have that type of support available, and I look forward to hearing more about the process.
	Many of the other hints in the system come down to the fact that we must give individually based support throughout the process. If we do not, everything is going to start to slip. Can we have a little more guidance as to where we are going to find the extra resources and people to administer the system, if we are cutting staff numbers in the department? GPs will be able to do a lot, but there will have to be greater knowledge, awareness and training among those working within the Minister's own department. Where are we going to get the increased training and awareness? The good generalist training that has been in place seems to show that there are problems about expertise. Where for the GP and those other workers is there going to be the course that tells them when they have to bring in the experts? I have asked this question before but I have never received a satisfactory answer. When are we going to make sure that when the GP does not know something, he is told that he must bring someone else in? It is better to act too early than too late—and not when the system has broken down, because that way would guarantee appeals. Can we have some guidance about that level of implementation and how it will relate to an individual person? If it does not, incapacity benefit, which had effectively become the way in which to hide unemployment statistics throughout a long historical period, going back longer than 1997, we will merely tackle the tip of the iceberg and not the real problem.

Lord Hunt of Kings Heath: My Lords, I thank both noble Lords for their remarks and their generally constructive comments and questions. Obviously, the intention is to bring legislation to Parliament, one hopes in the summer, because we need to get on with the legislation if the new IB scheme is to be ready to roll from 2008, so I look forward to what I am sure will be some very interesting debates in the next few months.
	I will not rise to the rather depressing analysis of the economy made by the noble Lord, Lord Skelmersdale. The economy remains one of the strongest labour markets in the world, and 10,000 new vacancies are notified to Jobcentre Plus every working day. The experience of Pathways to Work shows that even where people may have been disabled severely or where they have suffered considerable illness they have been able to get back to work with the kind of support that was given in the pathways pilots. That fills me with confidence about the route that we are going down. This is not a shot in the dark; we are building on the work that my noble friend Lady Hollis had a great deal to do with in previous years. We can see already what kind of intervention works.
	Of course, the noble Lord, Lord Skelmersdale, is right to say that some people will not be in a position to work, certainly in the short to medium term, and that is recognised in the Green Paper. However, we should not write off anyone's chances completely. We need to have a flexible system that ensures that people's capability is considered from time to time. One of the great problems of incapacity benefit has been that once people have been on it they have tended to be left on it without the intervention and support that is so clearly required.
	The thrust of the early remarks made by the noble Lord, Lord Skelmersdale, was that we should be much more concerned about encouraging and supporting rather than conditionality and sanctions. This programme is going to work because it gives encouragement and support. The noble Lord mentioned people who had been on incapacity benefit for some time who were nervous about going back to work. I agree that it may be for many of those people that the health problem is no longer the key issue about going back to work; it may be that they lack the confidence or the motivation. That is surely where some form of conditionality comes in and some ability in relation to sanctions to encourage people to seriously consider work and the availability of support for going back to work.
	There is no question that the experience of Pathways to Work suggests that, even for people who had been on incapacity benefit who volunteered to come into the programme as existing claimants, the personal advice and support has been a great morale booster. The most heartening thing about Pathways to Work has been the more than 10,000 people who were already on incapacity benefit who volunteered to go on to the pathways programme to receive support. I am meeting some of those people who have now gone into work, and one can see, through the personal advice and the individual service tailored to them, how effective it can be.
	The noble Lords, Lord Skelmersdale and Lord Addington, referred to GPs and health, and I very much agree with them. We are keen to work with the health service and with general practitioners. It is not the role of the DWP to come between the GP and the patient, but there is no question that we need a culture change not just among GPs but among employers and employees. There has been a stock reaction that says, "You are ill; therefore work is not good for you". We need to change that, because clearly for many people being stuck on benefits for many years has had adverse consequences for their long-term health and for general outcomes in terms of finance and family support. If we can encourage GPs and work with them to encourage patients to consider work as a good outcome that would be helpful, and it goes alongside the efforts that GPs are now making to be much more preventive in their approach. We support them in that.
	The noble Lord, Lord Addington, asked me about the degree of co-operation between the Department of Health and the Department for Work and Pensions, and about the kind of support and training that will be available for GPs. He is right to emphasise that as important. The strategy that we launched in the autumn about healthy workplaces was a joint strategy between my department and the Department of Health. I regard that as a significant event. The more that my department and the health department can work together nationally, and the more that Jobcentre Plus and DWP officials and primary care trusts can work together locally, the more likely we are to have a holistic and supportive approach in which GPs can respond to the full. Any noble Lord who has visited a Pathways to Work scheme will find that, locally, primary care trusts have had an important and positive role to play.
	I agreed with the noble Lord, Lord Addington, when he referred to the specific support in relation to mental health. He talked about the benefit of quick access to physiotherapy. The earlier the access, the more chance you have of nipping a problem in the bud. That must be the same with mental health. We are working with the Department of Health. Some pilots are going to start that look very much at that kind of early intervention. I am hopeful that that will create a pathway for the future. I also agree with him generally about training for medics and GPs. My right honourable friend Mrs Margaret Hodge and I met leaders of the medical profession this morning to discuss those issues, and were encouraged by the response. We will take forward work to develop training in the way that the noble Lord suggested. I am happy to discuss with him in further detail some of the proposals that we have in mind.
	The noble Lord, Lord Skelmersdale, asked me about the average length of time. I shall try to find out the figures if they are available. I agree with him that, whatever the figures are, the time is too long. IB has been too passive. This has to be a much more active approach. It is a supportive approach, and we know from Pathways to Work that a supportive approach works. It is an individually based approach, as the noble Lord, Lord Addington, said. I am confident that we can develop capacity in my department. We will look to the private and voluntary sectors to help us with that, but I again pay tribute to the people in my department and the contractors on Pathways to Work, who have done a marvellous job. They have shown how an individually based approach can work, and that certainly is the model for us to build on in future.

The Earl of Mar and Kellie: My Lords, I want to ask the Minister about the operation of the pilots in Scotland. First, will any pilots be undertaken in the city of Glasgow, which seems to have a disproportionate number of IB claimants under 25? The findings of such a pilot project will be interesting. Secondly, will there be any difficulties in dealing with GPs in Scotland because the health service is devolved?

Lord Hunt of Kings Heath: My Lords, a further four pathway pilots were rolled out in October 2005, which were Tees Valley, Lancashire West, Cumbria and Glasgow. I hope that that meets the point. If the noble Earl would like, I could write to him with further details about the Glasgow pilot and, if he would like to visit it, I am sure that that would be extremely welcome. He has really picked me up on the question of the devolved administrations. I should have said that, in the work done between my department and the Department of Health, we have also kept in close touch with Scotland and Wales in relation to their own health departments. In the light of his comments I will make sure that, in the work that I mentioned in relation to the noble Lord, Lord Addington, we embrace the Scottish health service—it has a key role to play—and the preventive approach. GPs in Scotland are keen to take that approach; some measures that they are taking in helping to improve the overall health of people in Scotland are very consistent with what we wish to do in relation to IB.

Lord Ashley of Stoke: My Lords, I applaud the Government's efforts to swing around the rather cumbersome vehicle of incapacity benefit. I pay tribute to him and to my noble friend Lady Hollis on their role in formulating these imaginative proposals. Perhaps I may enter one caveat. Will Ministers bear in mind that pressure of any kind on vulnerable people would be unacceptable and that ultimately the only person who really knows whether they can work is the disabled person?

Lord Hunt of Kings Heath: My Lords, I am grateful to my noble friend for his general welcome. I am sure that we will enjoy his contribution when legislation is brought before your Lordships' House. He made an important point about undue pressure being put on someone who has suffered health problems or is disabled. I assure him that the kind of process that we are taking forward, built on the experience of Pathways to Work, is very much about encouragement and support.
	The previous system has been passive and all the incentives have been wrong. We want to turn the incentives around with the impact that work-focused interviews can have. This is about ensuring that people are given support to be as independent as possible. It is not too much to ask for an element of conditionality in the requirement to attend work-focused interviews. As time passes, we will develop that in terms of work-based activity. That might embrace training and tasters of work so that someone can discover what it is like to be at work again if they have been on benefits for a long time.
	There is a rights and responsibilities agenda. It is right for us to be assured that it is appropriate for a person to continue to be on benefits or to go on to benefits in the first place. Here I would commend the new personal capability assessment process that we will develop, which, instead of just focusing on the nature of incapacity, will assess whether a person should be on benefit and look at their capability for work. My hope and intention is that this should be seen as a positive process. We should never forget that the outcomes for a person will be much better if they can be in work than if they have to remain on benefit.

Baroness Hollis of Heigham: My Lords, like other noble Lords, I very much welcome the Green Paper and my noble friend's Statement. This is truly a "respect" agenda for the clients of the Department for Work and Pensions. Perhaps I may make two brief points and then ask a question.
	First, what those of us who have worked in the disability movement know is that there is no automatic read-across from the state of disability in physical terms to the ability to work. For example, someone may be blind but working; others may have only a moderate degree of mental health problems, but conceive of themselves as unemployable.
	Secondly, in support of a point made by my noble friend Lord Ashley regarding consent, disability is as much a state of mind as it is a state of body. We know that when people came off the old invalidity benefit and were deemed capable of work, almost none of them went into work; they were recycled onto other benefits—very often JSA with a health attachment. Equally, we know that when lone parents suddenly lost their right to income support because the youngest child reached 16, they did not go into work but were recycled onto other benefits. Therefore, as all noble Lords have said, unless there is early intervention to keep people attached to the labour market, efforts to get people back into work will not succeed.
	That brings me to my question, which is about the missing "E" word—employers. Although we have rightly talked about doctors, the key player is, in my view, the employer. We know that if somebody who leaves work because of a sickness is not re-employed by their former employer, they are not likely to be re-employed by anyone else. Will my noble friend therefore tell me what initiatives have been developed to address the very real problems, which the noble Lord, Lord Addington, outlined, of occupational health issues relating to mental health, depression and stress?
	Secondly, we know that lone parents do not seek childcare to suit their job; they seek a job to suit their childcare. To what degree, again, are we working with employers to make sure that the offer of part-time work is realistic and appropriate for the lone parent?
	The third issue is that of older workers. The question is partly the law—we are going to see legislation to that effect. Above all, however, it is the state of mind of employers as much as the state of mind of would-be employees that will make it possible for 55 year-olds, 58 year-olds and 60 year-olds to rejoin the labour market. Again, will my noble friend tell the House what steps we are taking in partnership to ensure that employers, as much as the medical service, are lined up behind our initiatives?

Lord Hunt of Kings Heath: My Lords, I am grateful to my noble friend. I agree with her two points, the first of which was about no automatic read-across. That reinforces the importance of, as the noble Lord, Lord Addington suggested, an individual approach to individuals, rather than blanket categories, which we have had previously. I also very much agree with her about the case for early intervention. All the work in this area suggests that early intervention can pay off enormously. Everything that we seek to do—whether in relation to incapacity benefit reform or the wider issues of healthy workplaces, which is the subject of a strategy that is very much embraced within the Green Paper—is about early intervention.
	My noble friend is absolutely right. GPs and the health service can play an important part, as can individuals, but we need employers to be on board as well. We need them in relation to incapacity benefit, lone parents and older workers. I think that this will be a major challenge for the Government in the future. The Pathways to Work experience is good—we have had co-operation from employers—but we need to do very much more.
	We particularly need to work with small and medium-sized enterprises. The evidence suggests that the large companies recognise these issues and are prepared to work with us. Indeed, on the wider health and safety agenda, in many places employers look very carefully at workplace design, are quick to deal with issues around stress, have very good occupational health services and make early interventions. I have come across a number of companies in which, if an employee reports sick either with muscular-skeletal disease or with stress, that is often a trigger to an immediate referral to an occupational health adviser, so that early intervention can take place. That is not so easy for SMEs, with which we clearly need to do much more.
	We will shortly be launching the Health and Safety Executive initiative Workplace Health Connect, which is designed as a free phoneline service for SMEs in relation to workplace health. That can be followed up by visits and signposting to expert services. I hope that it will be one of the important tasks that we will take ahead to embrace employers. Clearly, we need to do much more as well and I assure my noble friend that this will be a priority for us.

The Countess of Mar: My Lords, I, too, welcome this Statement, for which I am very grateful to the Minister. However, I am concerned about one group of people—he knows who they are. There are something like a quarter of a million people who have a diagnosis of ME/CFS. These people have fluctuating symptoms that vary from day to day. Very often, when they go for a medical examination they have rested well the day before and acquit themselves very well at the interview and in the tests. More and more evidence is building up, in the context of early intervention, that if they go back to work too early, they are likely to be off work for a very much longer time in the long run.
	Does the Minister agree that illnesses such as multiple sclerosis also carry with them a risk of depression? With regard to ME, why is stress laid on the psychiatric symptoms when, in his report, the CMO said that ME was equal to illnesses such as MS? Why is it stressed that people with ME are suffering from a mental illness or even a behavioural problem? It is simply not fair on them. More and more international evidence is coming forward that this is an organic illness, and it needs to be dealt with. Will the Minister please address my concerns in that direction? In addition, the noble Baroness, Lady Hollis, talked about employers. It is very difficult for employers—especially in small and medium-sized enterprises—to cope with someone who is well one day but not able to work the next.

Lord Hunt of Kings Heath: My Lords, I anticipated that the noble Countess might raise that question with me—she has been doing so for quite a long time now. I understand the issue. This is a Green Paper and I would welcome her contribution to the consultation on it. It is very important—this was the general thrust of my response to my noble friend Lady Hollis—that we do not categorise certain conditions and then say that all people with a certain condition must be dealt with in the same way. The emphasis here must be on individual capacity.
	The noble Countess also raised the question of fluctuating conditions. That is a matter that I well understand and it is an issue for both the individual and the employer. The Green Paper recognises the issue of fluctuating conditions. It points out that health conditions can vary widely and in intensity, and the system that we develop must be flexible in dealing with claimants' current conditions. I would welcome the noble Countess's comments on the specifics in the Green Paper on that.

Lord Lea of Crondall: My Lords, I draw attention to one very happy feature of the Green Paper. Chapter 4 on employing older workers helps to complete the jigsaw, to which my two noble friends drew attention, in that the employer's responsibility for employing older workers is becoming an absolutely central part not only of this debate but also of the debate that will lead to the Government's White Paper arising from the report of Adair Turner—the noble Lord, Lord Turner of Ecchinswell—later this spring. The connection is employer reluctance to take on more legal responsibility for people over the age of 65—that is one debate.
	The subject of another debate is that until recently it has been very convenient to say that it may be doing many people a public service to allow them to retire early. As we all know, for a million reasons, including the current pensions problems, employers will not easily be able to say that that is part of the solution. So I reinforce what my two noble friends said—that is, between now and the publication of the response to the Adair Turner report, building on this Green Paper there has to be an important crossover between this debate and the responsibility of the million people whom we want to get back into work and the construction of the answer to the Turner analysis on pensions.

Lord Hunt of Kings Heath: My Lords, I thank my noble friend, and of course he is right to suggest that there is a read-across to the Turner commission and the Government's decisions in relation to that. We have made some progress here in relation to older workers. I think that the definition of older workers is those of 50 and over, which will come as some surprise—indeed, shock—to your Lordships. There have been advances in recent years, however. The New Deal 50 plus has supported over 150,000 job starts since April 2000. We have had the Age Positive campaign, promoting the business case for an age-diverse workforce. My noble friend's point about employers and their attitude is important.
	The age discrimination legislation which will be brought forward will also encourage the employment of older people. There is no question but that older people can bring a lot to a company: maturity, skills, leadership and many other attributes. In the autumn, I visited B&Q in Bolton, which has employed older people. There is no doubt that customers like it. I met some employees in their 70s who were enjoying working, and the income. The more that we can recognise that, and acknowledge the work of employers and employees, the more that we can ensure that older people are able to remain in work.

Lord Morris of Manchester: My Lords, can we be assured that Ministers will be keeping in close rapport with both disability organisations and the Disability Rights Commission at all stages of the consultative process as it proceeds? I reinforce what my noble friend Lady Hollis of Heigham said about employers. Is there not a very strong onus on them to do more to help clearly employing disabled people who are now unemployed and seeking jobs, and on the department to improve employers' attitudes to the employment of disabled people?

Lord Hunt of Kings Heath: My Lords, the answer must be yes, but we want to do it in a way which opens the eyes of employers to the fact that if they do more—whether with older people, lone parents or people on incapacity benefit—it will contribute to their company's performance. I am convinced, having now visited a large number of companies who take this, and health and safety, seriously, that these are often the companies with a very profitable bottom line. We want to work with employers to ensure that many more opportunities are created. On disability groups and the DRC: yes, that goes without saying.

Lord Rix: My Lords, a few weeks ago I asked the Minister whether he knew the numbers of people with learning disabilities who had got back to work through Pathways to Work. Does the Green Paper envisage the splitting of the numbers of people with mental health issues and those with learning disabilities? The boxing together of those numbers makes it impossible to know exactly whether a learning disabled or mentally ill person is getting to work.

Lord Hunt of Kings Heath: My Lords, the noble Lord, Lord Rix, will know that I think that it is unfortunate if people with mental health issues are classified together with people with learning disabilities. Given my background, I sympathise with his comments entirely. I will certainly do everything I can to ensure that we deal with this issue.

Natural Environment and Rural Communities Bill

Lord Bach: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.
	House in Committee accordingly.
	[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Elton) in the Chair.]
	Clause 1 [Constitution]:

Lord Dixon-Smith: moved Amendment No. 1:
	Page 1, line 7, after "as" insert "the Commission for"

Lord Dixon-Smith: In speaking to this amendment, I shall also speak to Amendments Nos. 2 to 224, with the exception of the amendments listed in the subsequent groups up to and preceding Amendment No. 224, as shown on the groupings list. I hope that the Committee and the Deputy Chairman of Committees agree that it would be tedious in the extreme if they were obliged to listen to me more or less counting from two to 224. I beg leave to be absolved of the task. My apologies to the Hansard writers if this causes them any problems.
	This is a probing amendment. I am immensely grateful to the Public Bill Office and its staff for the help that I was given in putting the group together. I hoped to move a couple of simple amendments to give the Committee the opportunity to consider changing the title "Natural England". When I took the amendment to the Public Bill Office, the staff was obliged to tell me that one cannot amend titles in a Bill, but must amend the Bill. We had to amend the Bill all the way through and the Public Bill Office staff very obligingly did the work that resulted in this enormous group of amendments.
	At base, there are two simple amendments that give the Committee the chance to consider two different titles for what at present is to be titled "Natural England". One is the "Commission for Natural England", which would match the title of the Commission for Rural Communities, and the other is the "Natural England Executive". I considered whether a third title should be suggested, the "Natural England Agency", but that would have meant that this group of amendments was 50 per cent larger and would have increased the scale of the problem.
	The group is a consequence of the debate at Second Reading in which the noble Lord, Lord Carter, and I were in general agreement that "Natural England" is not a natural title for a government agency. When the Romans overran Britain, they thought that they saw natural England, but it was not natural even then: Stonehenge and other monuments and many communities were already in existence. The Normans catalogued England as they knew it in the Domesday Book. At the beginning of the 17th century, the field patterns that I knew as a boy were more or less established across the country. Today, almost a lifetime later, they have changed. That is natural England; it is constantly changing and evolving to meet the needs of man. The one thing that natural England is not is a group of people; still less is it a group of people brought together by legislation whose functions and purposes are defined and limited by legislation and are to change or, if one looks at it another way, to limit the change in natural England. That has nothing to do with nature at all except, perhaps, to control it. The two alternative titles would make the Bill more sensible.
	I hope that the Government will listen to this plea to try to make the title better than it is at the moment. This may seem a trivial matter, but it is serious. I beg to move.

Lord Carter: As the noble Lord, Lord Dixon-Smith, pointed out, the Public Bill Office has done a first-class job in listing all the amendments that are consequential to this amendment. This will be the largest group of amendments and, I hope, the shortest debate in the Committee on the Bill. I am sure that the Chairman will wish to call large blocks of amendments, "Not moved".
	We must be careful not to turn this into a joke. We must not leave this important organisation with a risible title. I mentioned the title to somebody outside this debate. He said that Natural England sounded like a brand of yoghurt. I favour the title "Commission for Natural England". That retains the words "Natural England", which I know the Government want. Perhaps we should have "Natural England Commission". I am not so keen on "Natural England Executive" or "Natural England Agency".
	We have the Home Grown Cereals Authority, the Meat and Livestock Commission, the Countryside Agency, and we used to have the Countryside Commission. We have the Rural Development Service, the Environment Agency and the Commission for Rural Communities. Now we have poor old Natural England, which sticks out like a sore thumb without the right subscript. I hope that between now and Report stage the Minister can consider this and that we can choose a title which we can all agree with.

Baroness Miller of Chilthorne Domer: Of course names are important. I welcome this very short debate, to which I do not intend to contribute for long. I simply make the point that the existence of any of these bodies is yet to be decided because, although I understand they all exist in shadow, this legislation has not yet passed through your Lordships' House. So we are talking about hypothetical bodies, although they seem to exist in more than shadow.
	I take this opportunity, slightly cheekily, to declare my interests for the record so that I do not have to do so when moving my amendment. I remind the Committee of my rural interests: I chair Somerset Food Links; my husband chairs the Flood Defence Committee of the Environment Agency; my brother-in-law is a cider brandy and cider maker, and I have a small rural business.
	That said, I hope seriously that, when we have discussed the functions of these bodies and, indeed, whether they should exist at all, we will return to the matter of the appropriateness of their names.

The Countess of Mar: My Lords, I declare an interest as a partner in a small family farm. When I first heard that this organisation was being called Natural England, I thought "What on earth does that mean?". I think that the noble Lord, Lord Dixon-Smith, is right: we need to have something that describes this more fully. Natural England means nothing.

Earl Peel: Perhaps I may intervene. I had no intention of doing so. I entirely accept what my noble friend Lord Dixon-Smith and, indeed, the noble Lord, Lord Carter, said. Natural England, as I think many of us said at Second Reading, is a pretty unsatisfactory and rather daft name. I cannot for the life of me—maybe I am missing a trick here—see how adding the word "executive" or "commission" to it will in any way soften the implication of that rather unsatisfactory term.

Baroness Byford: I support this proposal. There is confusion in the country. "Natural England" means many things to many different people. It certainly does not mean natural England to those of us who live and work with it and see it in that way. If the words could be altered, it would give the organisation a greater start in life. It is nearly an apology or an afterthought. At least people know what the Commission for Rural Communities is and roughly what status it carries, but currently Natural England does not have that attachment. I wish that I could say to the Minister that I have an alternative suggestion; but I do not, so I am afraid that the Government are swimming by themselves.

Lord Rotherwick: I declare my interests as a farmer who deals with SSSIs and nature reserves. This name, which has been explained as natural yoghurt among other things, sticks in my gullet. English Nature, as it is now called, spends most of its time asking to alter the countryside. Therefore, I can hardly see how you can go about doing business with it in enhancing the countryside. The name "Natural England" gives you the feeling that it is conserving something that has never changed in history.

Lord Bach: I thank all noble Lords who have taken part in the debate. I wonder whether the historians among us can tell us whether this is the largest first group of amendments ever in Committee; it must be close to it.
	My reply is intended to be brief. That does not mean for a moment that I do not accept that there is genuine feeling about the name. I say right at the start that of course I will take the matter back and look at it again but I have to say that I am not hopeful that I will return to this House with a changed name.
	We believe that Natural England, together with what is described as its strapline—"for people, places and nature"—sums up what the agency is to be about: conserving and enhancing for us all to enjoy now and in future the national treasure that is England's natural environment. The name was proposed by the chairmen of the three predecessor organisations—I am reminded by the noble Baroness that they are still in being—the Countryside Agency, English Nature and the Rural Development Service, following consultation with the staff of those organisations and their partners and has their support. That final point is important at a time of substantial change for all those working in those organisations.
	There are no established rules about whether the names of non-departmental public bodies should include the words commission, agency, council or executive in their title. Although there is a tendency for commissions to be mainly advisory, rather than executive bodies, such as Natural England is due to become, even that simple distinction has not been applied consistently.
	We favour the simplicity of the expression "Natural England" for two reasons. First, the many customers and organisations with which it deals will certainly shorten its title to Natural England, whatever formal name it is given in statute. There is a good argument for aligning its legal title with the name by which it is known. Secondly—I do not know whether this reason that has crossed the minds of Members of the Committee—it may help people to position it in relation to two important sister organisations: English Heritage and Sport England.
	Having made his brief remarks, I repeat that I will go away, talk about and reconsider the matter, but with no promise that we will change our minds.

Lord Dixon-Smith: I am grateful to all those who have taken part in this debate and supported my gentle little argument with the Minister, who has given a somewhat disappointing but, nonetheless, not impossible reply, for which I am very grateful. At least he said that he will look at it. We will have to study what he has said and then see what the results of that study may be to find out whether we need to take the matter more seriously in future. However, for now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 2 to 8 not moved.]

Baroness Miller of Chilthorne Domer: moved Amendment No. 9:
	Page 1, line 13, at end insert "or other persons"

Baroness Miller of Chilthorne Domer: The amendment is designed to discover to whom the functions of English Nature and the Countryside Agency, as they are dissolved, should be transferred. The Bill simply refers to them as being transferred to Natural England. I take the Committee back to the genesis of the Bill, which was the excellent report by the noble Lord, Lord Haskins, who is not in his place this afternoon. When he envisaged the Countryside Agency being dissolved and its functions streamlined, he suggested one integrated agency—that being Natural England. Substantially, what the Government have done in creating Natural England has been a good job.
	However, the recommendation of the noble Lord, Lord Haskins, was that the social and economic programmes should pass to regional and local networks of regional development agencies, local authorities and the voluntary and community sector. Many things that the Countryside Agency was doing will evidently not pass to Natural England. My amendment is intended to explore, and I ask the Minister, what exactly will happen to those functions.
	Before I return to some of those functions more exactly, I should like to make a general point on the Bill. The Bill is about the administration of rural England. The governance of rural England has been woefully lacking in the run-up to this Bill. Now, we are constrained by the form of the Bill, so it will still be lacking. The Bill reorganises the quangos. Unless we can do a particularly good job in this House—of course, I hope that we will—I do not believe that it strengthens the democratic accountability of those delivering these services.
	The Government are now having a debate about city regions. For rural areas, the city region concept is another step towards marginalising the opinions of smaller towns and rural communities. The money and administrative power to change life in rural areas would by this Bill be concentrated into fewer hands and minds, which I believe flies in the face of what the noble Lord, Lord Haskins, envisaged. As this Bill goes through, there will be a theme to the amendments put forward by these Benches, which will be to widen the number of bodies to which Countryside Agency functions can be transferred, to make all quangos more accountable and to question whether the existence of those quangos is necessary.
	When the EFRA Committee in another place made its recommendations on the draft NERC Bill, it said:
	"We welcome the Minister's confirmation that local authorities are included among the bodies to which the functions may be delegated under the draft Bill".
	In their response, the Government said that they recognise the crucial role played by local authorities, and so on. I will not bore the Committee with reading out any more. Members of the Committee can read it for themselves. However, in Clause 1, there is no indication of the functions being transferred elsewhere. The vital projects that the Countryside Agency used to do—for example, the Vital Villages Campaign, which helped with the preparation of parish plans for rural communities, and the Eat The View concept—need to be strengthened and continued. Those are the sorts of functions on which I would like the Minister to comment. I do not see a provision for that in this clause. Will the Minister explain to whom these sorts of functions will go, the funding for them and why? I beg to move.

Baroness Byford: In following the noble Baroness, Lady Miller of Chilthorne Domer, I speak to Amendment No. 10, which is grouped with Amendment No. 9. We are well aware—because we have been told—that the Rural Development Service will be transferred en bloc, I think, to become a part of Natural England. But that is not in the Bill. The other two organisations are in the Bill because they have to be dissolved in order to come back into being: there has to be a dissolution and a re-birth. I understand—please correct me if I am wrong—that that does not apply to the Rural Development Service, which is why it is being transferred in this way.
	I have some questions for the Minister with regard to the development service, and where its raison d'être lies, which follow on from my Question earlier today on the Rural Payments Agency. I was surprised that when the noble Lord, Lord Haskins, was asked to carry out this review, the Rural Payments Agency was not included in this remit. I do not think that it was, although I am sure that the Minister will clarify that. What is the Rural Development Service supposed to do in addition to what it has done in the past? What is its relationship with the Rural Payments Agency? Once it is up and running, even after my Question today, and it is a success—we wish it good speed—will the Rural Payments Agency still be necessary or will the Rural Development Service undertake to take on some of its responsibilities?
	The concept of the noble Lord, Lord Haskins, was to establish a new agency bringing together under one roof what had been done by several agencies, thus reducing costs, personnel, overlapping and regulation. This point was just referred to by the noble Baroness, Lady Miller. I have a concern which we shall touch on later, but I want to raise it now and leave out the detail at the later point. The original proposal was to set up a new agency under one umbrella. I understand that the new agency, Natural England, will be based in Sheffield but will be staffed by only 12 to 25 people. The rest of the organisation, English Nature, will remain in Cambridge, while parts of the Countryside Agency will remain in Cheltenham. At this stage, I do not see how cost savings will be made when staff and management costs still have to be met at three different bases. However, the idea behind the Haskins proposal was to bring these functions together in one place.
	The fact sheet published for the Rural Development Strategy 2004 makes reference to this:
	"The Integrated Agency will have structures at national, regional and local team level. Staff from the parent organisations will over time be co-located, to deliver operational benefits and achieve efficiencies through estates rationalisation".
	But that is not made clear in the Bill. I suspect that the costs assessment is flawed. I put this to the Minister carefully because so far I have not been able to get an answer: where will the savings be made if in fact there is not to be an amalgamation of all three agencies? That is my current understanding. Haskins made it clear that this would be done to save costs, reduce regulation and to bring the body corporate together.
	I want to add one more thing to the melting-pot. At a time when the CAP is under pressure and further reforms are likely, resulting in a possible squeeze on Pillar 1, what effect will that have in the future on the amount of money available to the Rural Development Service compared with what it has now? Some of that money may well not be forthcoming in future years. Has the Minister addressed this?
	I have covered the reasons for tabling my amendment. I am also slightly troubled at the way Defra itself is the corporate body responsible, the way this new agency is to take on an arm's-length government role—we shall consider the detail of that later—and where the individual elements each have their own responsibilities, linking with the Environment Agency, the Forestry Commission and many other bodies which obviously were not included. I should like some clarification of the position regarding the Rural Payments Agency if the Minister has it to hand. However, I am happy for him to come back to us with guidance because it would be of enormous benefit.

Earl Peel: I am extremely grateful to my noble friend for raising these important issues. I am bound to say that I too am in some confusion over exactly how certain aspects of the responsibilities of the RDS are to be deployed. I have before me the briefing paper distributed prior to the Committee stage. It is helpful, but it does not explain one or two issues. As I understand it, the environmental functions for which the RDS was responsible are to be transferred to Natural England. That includes agri-environmental schemes under, presumably, Pillar 2. But there are other schemes under the second pillar that apply specifically to rural business schemes. Presumably in the future they will not be dealt with by Natural England, and I assume that they will become the responsibility of the regional development agencies. I should be grateful if the Minister could confirm that.
	Given the ever-increasing role of the regional development agencies, there is a perception, which I think is true in certain parts of the country, that the RDAs themselves tend to be rather urban-based and do not take their rural responsibilities quite in the way that the Government had originally hoped. That being the case, I fear that those grants that might be applicable in rural areas for rural business schemes operated by the RDAs might not be quite as satisfactory as we would all hope. If the Minister could explain the situation to me, I should be extremely grateful.

The Earl of Erroll: Following on from what has just been said, I started to think about the potential problems of the Rural Payments Agency. I know from my wife's experience on the farm that all cannot be well with the RPA, despite the Minister's replies at Question Time today. For instance, despite the RPA having changes to the maps of my wife's place for many months, it sent them back to her on 23 December asking her to check all the areas and return them within seven days—not seven working days; seven days, over Christmas. I am sure the Minister will appreciate that this does not help the work-life balance.
	There were a considerable number of changes, but I managed to check them, and did find a couple of faults. This was not entirely the RPA's fault, as it is quite difficult, when you are sent only partial maps, to spot that one field's change may also affect another, and it is easy to slip up on forms. I trust that e-mailing them back on the seventh day was taken as sufficient evidence of hitting the seven-day deadline. I do not know when we will receive a response. Entry-level schemes and various other things depend on those maps, and so far we have been prohibited for many months from entering such schemes, at some considerable loss of income, because the RPA could not get the maps out. So all is not well there.
	Despite the answer to the question raised by the noble Lord, Lord Carter, I can tell the Committee that we have not received a payment since November 2004. That hits cash flow badly. If the RPA is going to be thrown into further chaos by these provisions, some arable farmers may have a lot of trouble. It is essential that the RPA is handled carefully throughout this, and with the minimum disruption. I was concerned when I heard all these points being raised.

Lord Bach: I will deal with these amendments in terms of why the Bill is as it is drafted. I will do my best with that. As far as these important broader questions of governance are concerned, the noble Baroness is right: I will not be in a position today to answer her and other noble Lords satisfactorily. With the leave of the Committee, I intend to write a substantial letter to noble Lords setting out some of the issues that the noble Baroness and others raised in this debate, which they will then be able to read at their leisure. If amendments are required after that, they can be brought at a later stage. I would rather do it that way than attempt to get note after note, and half-answer the important issues that have been raised. I shall of course answer some matters today.
	The intention behind Amendment No. 9 is to help clarify where the functions of English Nature and the Countryside Agency will be transferred on their dissolution. Our intention is to transfer functions variously to Natural England, the Commission for Rural Communities and the rural development agencies. Indeed, some of the work of the Countryside Agency has already been transferred to the RDAs.
	I appreciate that the Bill might seem incomplete because Clause 1(4) could be read as implying that all functions are to be transferred to Natural England. I can confirm, however, that subsection (4) is legally accurate as drafted, because no legislative powers are otherwise being transferred to the CRC or RDAs. Other bodies are not mentioned or cited in subsection (4) because those functions that are being transferred to the CRC and RDAs—for example, advice and funding powers—do not require amendments to primary legislation as they are covered in new or existing statute or will be done by secondary legislation. The addition of the words "or other persons" in Amendment No. 9 is therefore superfluous, although I hope that I have to some extent clarified that it does not prevent some of the work of these bodies being transferred elsewhere. I concede that this is a complicated issue. I shall be happy to take it away and consider whether there is a clearer way of dealing with Amendments Nos. 9 and 10 in due course.
	Amendment No. 10 deals with a similar point. It is an attempt to clarify the position of the Rural Development Service, which is a division of Defra and not a separate legal entity. As such, the Rural Development Service is—this is a rather unpleasant phrase—an emanation of the Secretary of State and it is neither legally necessary nor appropriate to mention it on the face of the Bill. It is appropriate to raise this sort of clarification only in the Explanatory Notes that accompany the Bill.
	However, I am happy to clarify the position on the RDS as best I can for the Committee. As Amendment No. 10 suggests, the existing functions of the RDS will largely be divided between Natural England and the RDAs, although some will remain with Defra or its agencies. The RDAs will take responsibility for what is described as socio-economic funding, as we made clear in the 2004 rural strategy, although this will be effected using the RDAs' own powers and changes to secondary legislation which do not need to be mentioned in the Bill.
	A large part of the Rural Development Service's functions, including the delivery of the agri-environment schemes—which we all believe will become central in the years to come—will be the responsibility of Natural England. The Bill provides a mechanism to delegate RDS functions using Chapter 1 of Part 8, powers to enter into delegation agreements, to which we will come later in the Committee but I fear not today—I hope not today—and we expect to use those powers for some of the RDS functions. Others will be managed by changes to secondary legislation or using Natural England's own powers conferred by the Bill, such as its powers to enter into management agreements established by Clause 7, which we may well debate later today.
	I can give no assurances that there will be any clearer way of dealing with the points raised by the two amendments but I shall look again at the Explanatory Notes and offer some alternative wording which sets out the position more clearly.
	I shall now do my best to answer some of the questions that have been raised. As to the issue around local authorities, since the Government's response to the EFRA committee's March 2005 report, we have altered Part 8 of the Bill, the flexible delivery arrangements, to add all local authorities to the list of what are described as "designated bodies" in order to bring them within the scope of the delegation agreements under Part 8 to permit functions to be exercised by local authorities.
	Indeed, so far as the governance of rural England and city regions is concerned, I hope I understand the issues. I ask the noble Baroness, Lady Miller, to be a little patient and allow the debate on these issues to be taken when we discuss the Commission for Rural Communities. There is a line of argument that says that if the noble Baroness is right about the effect of city regions, it is an argument for the CRC rather than one against it.
	The noble Baroness, Lady Byford, asked whether the Rural Payments Agency was included in the Haskins review. The answer is no, because its functions continue. Its main function is as a specialised accredited paying agency under European Community law. Although what the noble Earl, Lord Erroll, said was of considerable interest, and although we seem to have spoken of little else today but the RPA, it is not really relevant to the issues that the Committee has to debate. So if he will forgive me, I will not go down the road of mapping and the issues we have already debated.
	To return to the points of the noble Baroness, Lady Miller, as far as Haskins and democratic accountability are concerned, it is true that only NDPBs have replaced NDPBs. However, my noble friend Lord Haskins did not recommend a continuation of the social and economic roles of the Countryside Agency. By agreeing to create the Commission for Rural Communities, the Government's proposals will retain a broader range of bodies.
	The noble Baroness, Lady Byford, raised some important issues around the budget and the way in which costs have been estimated. I have some answers today. On Pillar 1 and Pillar 2 expenditure, she will know about the arguments around voluntary modulation. We will be able to modulate up to 20 per cent from Pillar 1 to Pillar 2 as a result of the December European agreement. On the budget for Natural England, there are still some important details to work out. I would rather write to the noble Baroness and copy the correspondence to all other noble Lords who have spoken.
	I hope that that explanation is reasonably satisfactory and invite the noble Baroness to withdraw the amendment.

Earl Peel: Before the Minister sits down, I still have a degree of confusion about this. As things stand, if a farmer were to apply for a grant that was of a rural development as well as an agri-environment nature, that would be dealt with by the Rural Development Service. But if and when the Bill is passed, if I have understood what the Minister said correctly, the agri-environment part of the scheme will in future be dealt with by Natural England, whereas the rural development part will be dealt with by the Regional Development Agency. If the Minister could confirm that, I would be grateful. If that is the case, it is perhaps a little more disjointed than I had hoped it would be.

Lord Bach: I will give the noble Earl a definitive answer in the letter I will send his noble friend. However, I think that he has it right. My reluctance to confirm that absolutely is that the rural development regulation is currently being discussed—it is through the European process. Its implementation from 2007 onwards is being discussed within government. In principle, what the noble Earl says is correct. I will detail that in a letter.

Baroness Miller of Chilthorne Domer: I thank noble Lords who have spoken in this illuminating debate. The Minister is right that as we progress through the Bill, we may come to understand more clearly the Government's intention. It will put us on a better footing at Report to know what should be altered in the Bill.
	I agree with the noble Earl, Lord Peel, about the funding pots being in so many different places. I suggest that the streamlined approach of the noble Lord, Lord Haskins, which makes it easy for people to understand what funding pots are available and who is administering them, is far from being achieved.
	I gently make the point that it will make things difficult if the Minister says too often that he will reply to us by letter. I appreciate that the Government have made the Floor of the House available for the Committee rather than taking it in Grand Committee and I am very pleased to see that their faith in how many noble Lords would want to attend has been justified because there are in excess of 40 noble Lords here at the moment. That would have put extreme pressure on the Moses Room had we held the Committee there. However, the other point of having the Committee on the Floor of the House is that should we feel it necessary, we could put things to the vote. If the Minister replies by letter, that becomes difficult.
	I will read carefully what the Minister said, but I am slightly confused about his reply to the substantive part of my amendment. I think that he said that the noble Lord, Lord Haskins, did not recommend that the social and economic programmes would be devolved in any way, but recommendation nine specifically says that such programmes would pass to regional development agencies, local authorities and the voluntary community sector. I would say that he did envisage those programmes continuing and passing to certain bodies and at the moment that is not on the face of the Bill. I understand what the Minister is saying about Part 8, and no doubt we will discuss that when we get to it, but that matter is entirely between the Secretary of State and whoever he decides to delegate things to. It puts nothing on the face of the Bill so it is not an answer to these questions. I appreciate that we have the entire Bill to go through and then we have Report so, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn
	[Amendments Nos. 10 to 12 not moved.]
	Clause 1 agreed to.
	Schedule 1 [Natural England]:
	[Amendments Nos. 13 to 20 not moved.]

Baroness Byford: moved Amendment No. 21:
	Page 44, line 14, after "appointed" insert "following an interview and open selection procedure,"

Baroness Byford: In moving this amendment, I will speak also to Amendments Nos. 22, 23, 26, 31, 36, 43, 44, 49, 53 and 98—quite a batting order.
	I was not minded to be difficult, but one of the things that is taxing our minds is the whole question of how a non-departmental government body is remote from the Government. One of the key things to do is look in the schedules. As members of the Committee will see, the Secretary of State has an immense amount of power within these schedules to appoint members to the board, chairmen and staff. I will briefly go through the amendments as best I can.
	On Amendment No. 21, it is the stated policy of this Government to make all public appointments through the commissioner. The intention should, however, be placed in the appropriate places on the face of the Bill. If that is not done, it will only require a statement of the change of policy to allow senior appointments in highly influential positions to become a gift of the Minister or the outcome of a political debate. The changes to be initiated by this Bill will have the effect of reducing the amount of the cross-tension between bodies involved in the running of the countryside. By cutting the number of bodies that have equal influence over what happens the Government have, in effect, reduced the amount of decision between various departments and the agencies. The role, for example, of the chairman of Natural England will be even greater than that of the existing chairman of English Nature. The Bill should safeguard appointments to such positions by including the words which would give effect to the current policy.
	On Amendment No. 22, I understand that the Government intend Natural England and the Commission for Rural Communities to be these arm's-length bodies. They are envisaged as demonstrating a great deal of independence from the Government. The appointment of the chairman is clearly in the hands of the Secretary of State. The remaining appointments are to be regulated by the Commissioner for Public Appointments, so the shortlist will, as it were, conform to the rules of engagement. However, the final decision on other board members should be in the hands of the chairman and his advisors. We have tabled these amendments, relating to the maximum 10-year period permissible for any board member but, as things stand, Natural England and the Commission for Rural Communities could each be run for many years by up to 16 people all appointed by the Secretary of State herself. We feel that such a situation could compromise any claims to independence, and might inhibit the ability of the chairman to run his board effectively.
	The commission in particular will be concerned with ensuring that rural funding is put to the correct use. That funding will now come almost entirely from the rural development agencies, with only national projects being supported directly by Defra. The chairman of the board of the commission will need to be competent, effective, knowledgeable and hard-working, which I am sure that he or she will be, and the commission will need to be a cohesive, whole operation, run on a basis of mutual respect and trust. The duty to ensure such a position must rest with the chairman and his should be the final approval for membership of that board.
	Much the same qualities will be demanded of the board of Natural England, and the chairman will have a similar need to establish and maintain a tightly knit organisation. To conserve, enhance and manage the natural environment for the benefit of present and future generations is a daunting task, which will not be made any easier if the board is not a first-class team. The emphasis is on the team and how good that team is, as I have no doubt that the selection process will throw up those who are highly qualified to do the job—and we obviously all hope so. The final selection must be seen in the same light as that of an expedition leader or captain of a round-the-world yacht. In those circumstances, compatibility and having a person to fill each team role and function is considered vitally important and, if we got it wrong, it could be very difficult.
	Amendment No. 23 and related amendments are consequential amendments, which are perhaps unnecessary in two respects. First, if the Minister agrees that the final selection of board members should be done by the chairman, he may wish to consult the Secretary of State, but we suggest that that should not be done the other way round. Secondly, if the selection process is of the quality expected, it is surely axiomatic that those appointed to the board and commission should have experience and demonstrate a capability for the type of work that they will be required to do. Is it truly conceivable that the Commissioner for Public Appointments does not have as part of his remit that appointees should be fit for the purpose?
	I turn to Amendment No. 26. The independence of any board or commission is surely highly questionable, when the members of which are appointed by the Secretary of State, the chairman of which is then chosen by the Secretary of State and the deputy chairman of which is also selected by the Secretary of State. It casts doubt from the very beginning on the trust that the Secretary of State places in her chairman and in the strength of her intention to remain at arm's length. When, however, the Bill lays down that having consulted said chairman on the selection of remaining board members, the Secretary of State may choose without consultation the deputy chairman, one can be in little doubt that the Secretary of State means to have a strong and ongoing influence in all matters relating to the conduct of the board and the commission. We should prefer the chairman to appoint the members of his team in conjunction with the Secretary of State, and they then select from their midst his deputy.
	Amendment No. 31 is a probing amendment. The Bill refers to whether a person has had his estate sequestrated in Scotland. Presumably, sequestration does not apply in Wales, which has the same arrangements as England. Would proceedings in Tenerife, the Bahamas, Florida or wherever be regarded in the same way? That is the obvious question that follows the tabling of this amendment. Have we here an oblique indication that the board of Natural England might be staffed by Scottish landowners, or might it be possible that it will be served by someone whose main home is overseas—or do the Government see that the board should have among its members people from England who will decide matters appertaining to England and not Scotland or Wales?
	When we come to the amendments relating to Amendment No. 36, noble Lords will be pleased to know that I shall not refer to them in full again. Amendment No. 36, which would leave out "pensions", is a probing amendment. I am quite mystified by this provision. Unless the Minister intends the word to mean something other than is normally meant, I cannot agree that the board of Natural England should be empowered to pay a pension to any of its members. I do not know whether that is already so—but I cannot think of a board whose board members, rather than staff, are paid pensions. I was intrigued by that.
	Paragraph 11(b) enables the board to pay sums,
	"towards provision for the payment of pensions".
	Empowerment to pay pensions to existing members, however, implies that the board will take over responsibility from another pension provider. Thus someone joining the board who, while still relatively young, is entitled to a pension from the police or Armed Forces, might be covered by this provision—or is the Minister contemplating the possibility that the board might attract applications from senior civil servants or ex-politicians who would be entitled to draw a pension while fulfilling their contract with Natural England? The idea that the board might take on the responsibility for paying the pension of someone from the private sector is extremely far-fetched, but I suppose that if the permission were there it could happen.
	On Amendment No. 43, both board and commission are intended to be non-departmental public bodies. As the Bill stands, however, the Secretary of State will be able to appoint the chairman, the deputy chairman, the remaining members and the chief executive. That could amount to 17 people in each organisation. I am no statistician, but if there were two members under 50, 12 under 60 and three older than that, if three left before they reached 65 or two of the over-60s stayed until they were 72, the appointing Secretary of State could be responsible for more than half of each of the governing bodies a decade later. I am sure that that is not what is envisaged. Under which circumstances would sub-paragraph (3) operate? Who would decide that the chief executive should be appointed by the Secretary of State? Would it come from the Cabinet, would the Secretary of State simply claim the duty, or would the chairman turn to the Secretary of State rather than trust the board? That single line in the Bill poses more questions than it answers.
	Amendment No. 44 requires a shorter explanation, for which I am thankful. The amendment should be read along with paragraph 14 on page 49 of the Bill. I understand that unless some such wording is in the Bill, neither body will be able to employ staff, despite paragraph 13(1) in both schedules. Perhaps the Minister will simply confirm that no intention is implicit in this permission.
	Amendment No. 53 is a probing amendment. Why does the Bill lay down a separate rule for payment of the increases in superannuation payments? Why does it not simply say that the board will be responsible for omitting all such dues? Why, too, is the payment of such sums not apparently covered in paragraph 15(b)?
	Finally, Amendment No. 98 is another probing amendment. It is my understanding that any body corporate is bound by a number of Acts which require it to meet financial, employment, competition and many other standards. In all cases, that will render them liable to inspection by Customs and Excise, the Health and Safety Executive, the Audit Commission and maybe a host of others. What will be the nature of the Secretary of State's inquiry? What type of person will inspect and make copies? What explanations will be sought and why? How often can that intrusion occur? Will the outcome be made available to the chairman? Will the Secretary of State publicise the exercise, the reasons for it and the results?
	I apologise enormously that the amendments were all grouped together but they are so interlinked. I beg to move.

Baroness O'Cathain: In view of what my noble friend has been discussing in terms of the operation of the boards, I find it absolutely unbelievable that the Secretary of State should be able to appoint the chairman, the deputy chairman, all the board members and the chief executive. We in the corporate sector, in private companies, have been "Higgsed"—and I hope that the agricultural department knows what that means. There is a rule of corporate governance, there is a code of practice, and the independence of the board is absolutely paramount. The independence of everyone who is appointed to the board is scrutinised and agreed on by other members of the board, by the nominations committees and by the chairman. If they are all appointed by one man, however marvellous the great and the good that are on these boards, I fear that their independence will be compromised.
	As for the idea that board members should be given pensions—surely that compromises independence. I know that that did happen in the old utilities years and years ago, but when they were privatised and independent board members were appointed, that went out the window. There is no way that the appointment of a non-executive director to a board, or an independent chairman, independent vice-chairman or deputy chairman, should include a pension; absolutely no way. Am I missing something really different?

Baroness Miller of Chilthorne Domer: The noble Baroness, Lady Byford, has raised a number of interesting issues for debate. Things have moved on since I first became aware of some of these issues. We now have a Commissioner for Public Appointments, which we did not have in the early 1990s. These are substantial issues. Although that commissioner has radically improved things, the Secretary of State is the person who finally approves appointments. Civil servants in the department that is being scrutinised may not feel that they want board members who are extremely critical and who are going to really scrutinise the work of either the civil servants or the officers of an organisation such as Natural England. Those civil servants are fundamental to drawing up the list that goes in front of Ministers. Natural England may also have comments on Defra's performance. We will come on to the CRC. There are many questions about how those appointments will happen.
	I do not entirely agree that the chairman alone should be responsible for appointing the other board members. That would concentrate power in too few hands; I would like to see it kept within the commission's remit. The ability of board members to remain independent is somewhat compromised when it is civil servants who are ticking the list of the quango-friendly faces and putting a big red line through those who are known to be quite difficult quango members.

Lord Clark of Windermere: My Lords, first, I declare an interest as chairman of the Forestry Commission, which is not a non-departmental public body but is a government department. It is not quite the same, but there are similarities. I thank the noble Baroness for introducing the group of amendments in the way that she did. These issues do need raising, they do need examining, and they do need measuring up against the corporate private sector as well. She has done us all a great favour by tabling the amendments.
	If it were to happen as it appears in the schedule I would agree with her, but as I understand it that is not how it will operate. I speak as someone who was involved in the Nolan-type process in the early years of this Government. The whole House is keen that we get the widest group of people on this body that we possibly can. I assume that the Government would follow the normal practice. The positions would be publicly advertised; a shortlist would be drawn up by civil servants or public servants; and those interviewed would have to appear before an appointment board. That appointment board at a senior level would be composed of the chairman, the chief executive/director general and probably an independent civil servant. In the Forestry Commission, we always insist that there is also someone from the Civil Service Commissioners there, who is completely independent, to ensure that there is absolute independence at that stage.
	Once the interviews have taken place and an appointment is recommended, the key issue is who makes the appointment. Is it the Secretary of State or is it the chairman? I favour the Secretary of State, if we follow that process, for this simple reason. It seems to me that the role of the members of the boards is to act almost as a non-executive would on a public/private board. Therefore, the job of that individual is, on the one hand, to aid and assist members of staff of that organisation, but equally to challenge those executive members of staff. It may well mean challenging the chairman. I feel that you are more likely to get that independence, which is vital, if the final appointment is made by the Secretary of State, on the recommendation and the advice of an appointment panel, than if the appointment was made, even after that, by the chairman of the organisation.
	I argue from the point of independence, which we all want, that it is better to leave it with the Secretary of State. However, we certainly need reassurances that it would not be an appointment by the Secretary of State per se; it would be after a due process along the lines of what is now normal process. We may need to have that in the Bill; I do not know. We need to get that agreement. If that turns out to be the case, I disagree with the noble Baroness and we should allow the Secretary of State to carry on with the appointments following the normal process.

Baroness Young of Old Scone: For the benefit of the House, I reassure the noble Baroness, Lady O'Cathain, that this is not a heinous process that produces lapdogs appointed by the Secretary of State. As an ex-chairman of English Nature and the current chief executive of the Environment Agency, I have been appointed by the Secretary of State on numerous occasions. To my certain knowledge, Ministers on frequent occasions have wished that both I and my boards would go somewhere else and not express the independent views that we have. The arrangements that are currently being proposed for Natural England are not out of line with those that have worked fairly successfully for the past 10 years in both English Nature and the Environment Agency.

Baroness Farrington of Ribbleton: In seeking to reply to the amendments and to the points raised by noble Lords, I will try to cover them as fully as I possibly can, having regard to the point made by the noble Baroness, Lady Miller of Chilthorne Domer. I may have to write on some of the technical detail, and there may be issues raised during the Committee stage on which a meeting between now and Report would be helpful.
	I think it would be helpful if I were to speak to Schedule 1 before we consider the amendments in the group. The schedule sets out the constitution of Natural England, including provisions about its status, membership, terms of office, pay and pensions, staff, procedure, accounts and annual reports. Much of that is self-explanatory. The text has been amended to reflect many of the points raised during pre-legislative scrutiny, making the independence of Natural England clearer in the Bill.
	A minimum and maximum number of board members has been specified to give a range of eight to 15, in line with the Environment Agency. Heaven forfend that the noble Baroness, Lady Young of Old Scone, should ever be a thorn in the side of anyone, even when she expresses her views with commendable frankness. She demonstrates that independence arrives according to who you appoint, and not always according to the procedure used. Paragraph 3 was also introduced, placing a duty on the Secretary of State to have regard to the desirability of appointing a person to the board who has experience of, and has shown capacity in, some matter relevant to the functions of Natural England. The Bill does not, however, include a power for the chairman to appoint board members, which was a recommendation made by the EFRA Committee. That would be against what is said by the Office of the Commissioner for Public Appointments—a point that received support from around the Committee—and would raise serious issues of ministerial accountability.
	Amendments Nos. 21 and 22 require the Secretary of State to select the chairman of Natural England following open and fair competition regulated by the Commissioner for Public Appointments, and to allow the chairman to appoint the board. Schedule 1 does not currently specify the procedures which the Secretary of State should employ when appointing the chairman and members, because Ministers are already required to follow the code of practice of the Commissioner for Public Appointments when making appointments to non-departmental public bodies. I hope that that reassures the noble Baroness, Lady Byford, in particular. Natural England will be regulated by the commissioner and covered by the code, as is the case with all other NDPBs. Although Natural England will be a fully independent NDPB, it is also accountable to the Secretary of State. Appointments to the board provide a necessary link in the chain of accountability between Ministers and the board, which has collective responsibility for ensuring that Natural England discharges its statutory duties within the framework and according to the priorities specified by Ministers.
	Amendment No. 23 deletes paragraph 1(2) and (3) from Schedule 1. Sub-paragraphs (2) and (3) will require the Secretary of State to consult the chair of Natural England when making board member appointments, and to have due regard to ensuring that all members can bring relevant experience to the Natural England non-executive board. As the chair will be working closely with the non-executive board, the chair should have a role—one protected by statute—in advising Ministers of the skills that will best help the board in its deliberations. In answer to the noble Baroness, Lady Byford, I can say that sub-paragraphs (2) and (3) are already designed to safeguard the quality of the non-executive board and ensure that those appointed are knowledgeable and able to make a contribution. The chairman-designate of Natural England will be a member of the appointments panel.
	Amendment No. 26 deletes sub-paragraph (4), which allows the Secretary of State to appoint a deputy chair. Natural England is a large public organisation with diverse national responsibilities and many thousands of customers. The appointment of a deputy would bring flexibility in the allocation of tasks and provide continuity in the event that the chair resigns or is indisposed for any period. Because in unfortunate circumstances the deputy chair could end up having to act as chair of the body for a considerable time, the Secretary of State's role is the most appropriate.
	Amendment No. 36 deletes a provision relating to pensions. That point was raised by the noble Baronesses, Lady O'Cathain and Lady Byford. The chairmen and deputy chairmen of English Nature and the Countryside Agency are already pensionable posts. There are provisions in the Bill for paying pensions to board members and officers. That is not an unusual practice.

Baroness O'Cathain: I hate to interrupt the noble Baroness. In the corporate sector, Sir Derek Higgs brought in the code of corporate governance to make sure that appointed non-executive directors, chairmen and deputy chairmen of corporate companies were absolutely independent. She should check with the pensions industry, but I am sure that everybody—but everybody—would say that to have a pension for a part-time member of a board jeopardises their independence. These are not executive positions, as I understand it; we are talking about independent, non-executive people who are there to help the chairman, help to develop the staff, ask the difficult questions, support the whole company whenever it is under threat, and work jolly hard. If you give pensions to those people, they will say, "Gosh, I'd better not ask that question. If I do, I might be slung out and there goes my £25,000-a-year pension", or whatever it is.

Baroness Farrington of Ribbleton: I shall certainly read and consider the points that the noble Baroness makes, but long experience in local government taught me that many people end up with no pension at all at the end of a life giving public service. That is the alternative argument in terms of the role.

Lord Rotherwick: The whole House accepts that Ministers are in that situation as well.

Baroness Farrington of Ribbleton: The point is taken, but Members of this House do not receive a salary for their work. I promise that I will look at the point raised by the noble Baronesses, Lady O'Cathain and Lady Byford. I am not giving any commitment at all to respond, but I am interested in it.

Baroness O'Cathain: I shall spend some time walking the Minister through the issues, if she likes. The point about pensions is a step too far; it is key. I understand absolutely where she is coming from, which is why I gave the example about the water utilities having pensions for directors on that basis. Since they were privatised, and since the Higgs corporate governance code has come in, that is not acceptable because it is regarded as prejudicing independence.

Baroness Miller of Chilthorne Domer: As the Minister is looking at this issue, might she be able to furnish us before Report with a list of exactly which non-departmental public bodies offer pensions to their board members?

Baroness Farrington of Ribbleton: I can certainly attempt to get a comprehensive list, and we will furnish information from the most comprehensive list I can get in the time. It is a matter of record that private sector remuneration packages are often significantly higher and give more scope to individuals to make their own private pension arrangements, based on the larger income. That may not be the total answer to the noble Baroness, but it is relevant. I repeat that currently the chairmen of English Nature and the Countryside Agency are in pensionable posts.

Viscount Eccles: I rather doubt whether we will get to the bottom of this subject while considering one Bill in this House, because such practices are varied. The Royal Botanic Gardens, Kew is mentioned in the Bill. The board members are trustees who are not allowed to be paid by law, so they do their jobs voluntarily. Some people are quite happy to do jobs voluntarily in all sorts of sectors of our lives. Other people are part time. I know from my own experience that you can be chairman of a public company and get no pension, but you can invest in a self-invested pension plan if you receive a reasonable fee. I suggest that we obtain a clear statement about the Government's policy towards the organisations mentioned in the Bill, rather than try to solve the range of ways in which people are remunerated, which I am afraid we would never manage in the time available.

Lord Brooke of Sutton Mandeville: I—

Baroness Farrington of Ribbleton: I thank the noble Viscount, Lord Eccles, deeply for his contribution. I did not intend to interrupt the noble Lord, Lord Brooke of Sutton Mandeville.

Lord Brooke of Sutton Mandeville: I apologise for intervening when the Minister sat down after her preliminary response. I was minded to speak, but was called out in connection with the next business, in which I have a small role to play. Because of that I wish to say what I was going to say in support of the spirit of the amendment.
	This Government take pride in joined-up government. I wish to use an analogous case, which may be some distance from this, but is in the same area. One problem that some of us on these Benches have had in connection with the National Lottery—and I declare an interest, because of my past involvement in it—has been that the principles of arm's-length distance and additionality, which were argued for very strongly by the present Government when they were in opposition, have been overtaken now they are in government by a willingness to throw away the additionality principle. In discrediting that principle, they have polluted the arm's-length principle, too.
	I agree that that is a distant example, and I am conscious that I am saying this in the presence of the noble Baroness, Lady Pitkeathley, who has more recent experience of these matters than I. Because of the read-across that we conduct in the light of the Government's pride in joined-up government, there is an underlying suspicion that relates to many of the propositions of the sort that we are discussing. I am delighted that my noble friend Lady Byford has moved the amendment.

Earl Peel: The noble Baroness, Lady Farrington, suggested that the payment of a pension was a form of compensation for the lower salary that a board member of Natural England might receive. That is a rather depressing suggestion or comparison. If one is invited to sit on a body such as Natural England, surely it is a public service and an honour to do so. That is what is behind the amendment, and my noble friend Lady O'Cathain is absolutely right in what she said about the pension issue. We are getting this completely wrong and we should go right back to basic reasons why people are invited to sit on boards such as this—because they are well-respected in the community and in return for that they should see it as an honour.

Lord Carter: We—

Baroness Farrington of Ribbleton: I have not finished replying and there have been many interventions.

Lord Carter: My noble friend might find this helpful. We are missing the point. We are assuming that the board members will receive pensions, which is extremely unlikely. I suspect that the Bill is drafted to give the Secretary of State power to pay pensions to the chairmen and perhaps the deputy chairmen, because the chairman is often asked to commit himself or herself to two days a week and will therefore be denying themselves employment elsewhere, in which they could earn a pension. It is as simple as that. It is because the higher paid members of the board, not the ordinary board members, have to commit themselves to a reasonable amount of time, during which they could earn reasonable sums of money in the private sector with pension rights.

Baroness Farrington of Ribbleton: My noble friend is right. If I accepted the argument of the noble Earl, Lord Peel, that people should be prepared to give of their time, that would preclude people with a great deal of expertise and much to offer who simply cannot afford the luxury of giving large amounts of working time to this sort of occupation. I know that he, like me, would want to see the best person doing the job, rather than the person who is most able to give freely of their time.
	The noble Lord, Lord Rotherwick, raised the question of membership of this House, which, as he knows, is not salaried. People understand that when they come here and they are paid on the basis of expenses—

Lord Rotherwick: I—

Baroness Farrington of Ribbleton: Please may I finish my sentence? Even on that basis, some people who could make a contribution to this House might have to forgo any type of pension if they were to devote a lot of time to membership of this House. I shall return to the rest of the issues when we have dealt with pensions.

Lord Rotherwick: I am grateful to the noble Baroness, but she makes my point very well herself. People in this House give up a couple of days of their time when they could be doing a highly paid job and gaining a pension for that. They do it for the honour. We feel, like my noble friend Lord Peel, that we are considering a similar case. Working for Natural England, looking after the jewels of our countryside, would be an honour.

Baroness Farrington of Ribbleton: No one saw my presence in this House as a greater honour than I did. I am also aware that other people have not been in the fortunate position where, had they been asked to become a Member of your Lordships' House, they could have afforded to pay the mortgage on their family home and educate their children by giving up full-time paid employment.

Lord Cameron of Dillington: I confirm what the noble Lord, Lord Carter, said. I declare an interest as a former chairman of the Countryside Agency. I was paid for three days a week—in fact I did four or five, sometimes six or seven. It seemed to me logical that if I was paid for three days a week, I should receive both a salary—it was some £45,000—and a pension on that. Pensions did not apply to the ordinary board members because they were de minimis.
	The noble Baroness, Lady O'Cathain, argued that I might not want to take a stand and, therefore, lose my job because I feared I might lose my pension. Surely, my salary is far more important than my pension. So was the noble Baroness's argument that I should not have been paid at all? I do not think that that follows. This clause applies only to the chairman, and possibly the deputy chairman, as the noble Lord, Lord Carter, said, if they happen to be working for a considerable number of days a week.

Baroness Farrington of Ribbleton: The noble Lord, Lord Cameron, is right, and I have yet to find an example of any member of a non-departmental public body who feels constrained in any way whatever in criticising the Government when they feel strongly about an issue, whether or not their posts are paid and pensionable. However, I shall read carefully what has been said. Of course, there are separate arrangements to provide pensions for the staff of an NDPB.
	Amendment No. 43 would prevent the Secretary of State from appointing Natural England's chief executive. It is normal practice, when a new body is set up, for the Secretary of State to appoint the first chief executive, who will also be designated as the accounting officer. In this way, a chief executive designate can be appointed in advance of the body having legal status to ensure the smooth running of the body once established.
	A considerable amount of preparatory activity is required ahead of Royal Assent to ensure that Natural England will be fit for purpose and able to deliver the planned efficiency savings from day one. This preparatory work is likely to have a significant impact on achieving important strategic outcomes.
	In practice, what we have done is to appoint a chair designate of Natural England—Sir Martin Doughty, who was appointed in November—who in turn sat on the selection panel which selected a chief executive designate, Dr Helen Phillips, who was appointed earlier this month and takes up formal duties next month. As I said, the appointment process is regulated by the Office of the Commissioner for Public Appointments. An assessor approves the advertisement, sits on the interview panel and issues a certificate of compliance. The Government follow all the codes of practice of the Office of the Commissioner for Public Appointments and the Secretary of State is the legal body that appoints chairs—some legal body must make appointments.
	The noble Baroness gave me a very complicated mental arithmetic sum, to do with what would happen if a number of people were appointed at certain ages and left at other ages. Well, in my education, I was never brought up on mental arithmetic. I promise to read what she said and to see whether I can get the answer, although, knowing the noble Baroness, I do not think that she would have posed the question if it did not give the answer that she wanted.
	Amendment No. 44 would remove the provisions enabling Natural England to employ staff, which would, of course, make it well nigh impossible for it to fulfil its role effectively. I am now aware from the debate that the reason why the noble Baroness, Lady Byford, tabled the amendment was to raise this useful debate about staffing issues. As the Committee may know, existing staff of the Countryside Agency, English Nature and Defra's own Rural Development Service will be hoping to transfer to Natural England this October.
	Amendment No. 49 would effectively remove one of the standard empowering provisions for NDPBs. This provision allows Natural England to pay pensions to its staff as required by the Secretary of State. I know that the noble Baroness will be pleased to note that the Cabinet Office requires ministerial governance of pensions and it will be a condition of entry for the Civil Service pension scheme.
	Amendment No. 31 would delete a provision that allows the Secretary of State to remove a member from the board if, as the noble Baroness said, they had their estate sequestrated. This does not apply in Wales, where people are already covered. I do not know whether it applies to somebody who comes from the Bahamas, but I will look into that. It may be that an individual who sought membership had been resident or had conducted business in Scotland and had the appropriate experience—as we know from this House—to bring valuable knowledge and expertise. The Bill merely rectifies an anomaly.
	Amendment No. 53 removes a provision which requires Natural England to pay any additional contributions that may be required to the pensions fund as a result of changes to which the Superannuation Act 1972 applies, such as changes in pay or grading structure. This, along with the matter with which Amendment No. 49 deals, is a fundamental requirement of membership of the Civil Service pension scheme. There is nothing more to it than that. I hope that that answers the concerns of the noble Baroness.
	Amendment No. 98 would prevent the Secretary of State authorising an investigator or team of investigators to undertake an audit-type review of decisions or actions taken by Natural England. This is a power of last resort and I am not aware of any case where it has had to be used. However, it is an essential safeguard of the accountability of the Secretary of State to Parliament for the activities of Natural England.
	I hope that I have covered the points. The noble Lord, Lord Brooke of Sutton Mandeville, tempted me into the field of Treasury decisions and the National Lottery. I am sure that he speaks in error, although I am quite sure that he speaks with strong personal conviction in the points that he makes.
	As I said to Members of the Committee—I am sure that they will be able to tell this, if not so far, then as we go further through the Bill—the many noble Lords with experience on NDPBs demonstrate that independence not only of thought but of action and speech goes along with the public duty. It is my belief that the public duty is not hampered by providing enough income to enable us to employ all those who could make a contribution and to choose from them the very best.

Baroness Byford: I will not detain the Committee, as we have had an enormously long debate—I had not quite anticipated it turning into quite such a marathon. I am very grateful to the Minister for trying to answer some of my questions.
	If I may, I would like to pick up on two things. The noble Lord, Lord Cameron, was very helpful in what he said. I believe that people should be paid for what they do—I have no difficulty with that at all—although I am surprised about the pension rights. In no way was I suggesting, in moving my amendment, that only those people who have money should serve on boards. That is clearly undesirable. All people, from whatever walk of life, bring skills and gifts to contribute to various bodies and boards.
	The pension issue still puzzles me, as I said. Perhaps the Minister can look at it again. I think that the noble Lord, Lord Cameron, was suggesting that the provision would just apply to the chairman. However, paragraph 11 of Schedule 1, on page 45 of the Bill, states:
	"If required to do so by the Secretary of State, Natural England must . . . pay such pensions, gratuities or allowances . . . in respect of any member".
	It is not restricted to the chairman or deputy chairman.

Baroness Farrington of Ribbleton: I believe that I am right in saying—I will correct it by letter if I am wrong—that the noble Baroness is right: the proposed power is given. I hope that that helps her.

Baroness Byford: My point was about the ordinary members of the board, whose commitment is not as big. The provision is not restricted to the chairman or deputy chairman; it applies to all. I will not go further on that point tonight, as I think that we have more than covered it.
	My Amendment No. 98 was a probing amendment to pose the question whether the Government are not slightly concerned by the powers in that particular sub-paragraph, which could allow a lot of different bodies to expect to take an interest, to interfere, to criticise or to intrude. There are so many bodies now that are set up to audit things, including the Audit Commission, the Health and Safety Executive and this, that and the other. That is why we tabled Amendment No. 98.
	At this stage, I will not ask the Minister to do any more with my set of amendments. I thank her most warmly, as I do all Members who have spoken to them. We all need to read what the Minister has said. Perhaps we shall return to some of it—not all of it, I assure her—at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 22 to 51 not moved.]

Baroness Farrington of Ribbleton: moved Amendment No. 52:
	Page 46, line 6, leave out "applies" and insert "can apply"

Baroness Farrington of Ribbleton: This is a very minor amendment to paragraph 16(1) of Schedule 1, with an identical amendment—Amendment No. 239—to paragraph 16(1) of Schedule 2. It is purely grammatical and has no effect on the Bill's text other than to improve the grammar. On that somewhat prosaic point, I beg to move.

On Question, amendment agreed to.
	[Amendments Nos. 53 to 102 not moved.]
	Schedule 1, as amended, agreed to.
	Clause 2 [General purpose]:
	[Amendments Nos. 103 and 104 not moved.]

The Duke of Montrose: moved Amendment No. 105:
	Page 2, line 4, after "to" insert—
	"(a)"

The Duke of Montrose: In moving Amendment No. 105, I shall speak also to Amendment No. 108. I hope that the noble Lord will consider them because in some ways they may be drafting suggestions.
	The amendments focus on the first subsection of the clause by effectively removing the word "thereby". At the moment, Clause 2(2) reads that Natural England's general purpose is mainly to,
	"ensure that the natural environment is conserved, enhanced and managed for the benefit of present and future generations".
	We then read that "thereby" Natural England will be,
	"contributing to sustainable development".
	I note that we have received a briefing from the triumvirate of the three government departments, which do not wish to be required to deliver sustainable development. I was going to call the three departments the "parents" of Natural England but I realise that it is not very natural to have three parents.
	There is a danger that with the present wording it will look as though "sustainable development" has been added as an afterthought. Nowhere does the Bill describe exactly what it means to "conserve" and "enhance" the natural environment. Grammatically, it reads as though sustainable development can be contributed to only through conservation, enhancement and management. Of course, development is not sustainable if it does not benefit the natural environment at the same time, but this wording suggests that sustainable development is something that can be accumulated over time.
	Sustainable development is distinct from conservation, enhancement and management. That same briefing that we received states:
	"Sustainable development cannot be delivered by any one body or government department. It is a concept which ranges from the global to the local covering all sectors of society—local communities, business, government and individuals".
	Sustainable development is not an issue that would give rise to conflict. It is a way of describing the results of the very best practice across the board, so surely it should be presented with equal weighting to the other descriptive terms that apply to Natural England. I beg to move.

Baroness Miller of Chilthorne Domer: The noble Duke raised some interesting points, but I will speak to them substantially under my own amendment in the group after next and so will not comment further at this point.

Lord Bach: This is the first amendment under Clause 2 and so perhaps I may say some general words about our approach to Clause 2. I shall then deal, if I can, with the noble Duke's points.
	The clause sets out Natural England's purpose. The general purpose in Clause 2(1) is deliberately broad, enabling and flexible. We want Natural England to contribute to current environmental policy objectives, while allowing sufficient flexibility to avoid restricting its ability to respond to future challenges. The new non-departmental public body is being established to ensure that the precious resource of our natural environment is conserved, enhanced and managed for present and future generations. It is about managing and enhancing places and nature and encouraging people to enjoy and benefit from them.
	As the Secretary of State said when the Bill had its Second Reading in another place:
	"Our natural environment helps to make England what it is, from our beautiful coastlines to our historic dry stone walls and hedgerows. We have stunning landscapes, rivers and lakes, set in Shakespeare's 'silver sea', a unique geodiversity and the flora and fauna that rely on this rich variety of habitats and ecosystems".—[Official Report, Commons, 6/6/05; col. 1008.]
	We need a strong and powerful organisation to build on the successes of the past and to ensure that this wonderful resource is rich, diverse and resilient and that its potential to generate social and economic benefits is realised.
	To give clarity and focus to this broad and challenging agenda, Clause 2(2), which we shall come to, elaborates on some of the activities which fall within the general purpose. It makes clear that Natural England's purpose encompasses the activities carried out by the constituent bodies and provides continuity with existing legislation. I emphasise that the list in Clause 2(2) is not exhaustive or hierarchical.
	Natural England's decisions must be aimed at achieving the general purpose and, as an independent NDPB, how Natural England achieves its purpose will be a matter for its board to discuss with Ministers. The general purpose sets the activities of Natural England in a sustainable development context, as envisaged in the rural strategy. It will be primarily an environmental organisation contributing to sustainable development through its environmental work, actively seeking social and economic benefits and avoiding unnecessary negative economic and social impacts.
	I turn to the amendment. As I said a moment ago, we believe that Natural England should have a role in contributing to sustainable development by promoting environmental outcomes which also generate social and economic benefits. It is important that Natural England is able to fulfil its potential and to be well regarded. We believe that by giving it a role in sustainable development, it can and will play an important part above and beyond that which the three predecessor bodies currently can. However, it will remain, first and foremost—I emphasise this—an environmental champion.
	No single public body is responsible for sustainable development; it is the context in which they operate. That applies, for example, to the Environment Agency and the regional development agencies, and of course it is right that it should apply to Natural England.
	An alternative formulation is offered by these two amendments, which splits the purpose into two: one relating to the natural environment; the other to sustainable development. We think that the danger of that approach is that Natural England itself—and the wide range of partners with which it will work—may consider that it has responsibilities towards sustainable development which are somehow independent of its environmental purpose. That is not our approach. In our view, sustainable development provides the context for Natural England and we want it to make a positive contribution to social and economic development. But that is not the same as giving it a sub-purpose related to sustainable development. That is our approach and, on that basis, I invite the noble Duke to withdraw the amendment.

Viscount Bledisloe: Let us suppose one has something which will make an enormous contribution to sustainable development. It will not conserve or enhance the landscape; indeed, it may marginally—very marginally—deteriorate the landscape. Any sensible person would say that the enormous contribution it is making to sustainable development makes it infinitely well worth putting up with the minor removal of the odd stone wall.
	Is the Minister saying that it would be Natural England's duty to oppose that, because its job is to conserve and enhance the landscape and it has no duty to promote, or allow the promotion of, sustainable development if it would do marginal damage to the landscape? It seems that, by the formulation the Minister and the clause are putting forward, Natural England is not allowed to balance benefits to sustainable development with minor disadvantages.

Lord Bach: The noble Viscount makes an important point, which I suspect we will be discussing in some detail when we come to Amendment No. 122 on the role of Natural England in making decisions. Sometimes there will difficult decisions between various aspects of sustainable development. There is a view that Natural England should choose the environmental side in all circumstances, and an opposing view—which the Government take—that an independent body like Natural England must be able to choose between the conflicting, if they are conflicting, possibilities. That is what it is there for. We do not expect that those conflicting possibilities will arise every time, or even very often. The hub of the debate about what is called the Sanford principle is the question that the noble Viscount has asked.

Viscount Bledisloe: With respect, the Minister has missed my point. If the only reference to sustainable development is that it is a spin-off from the rest of subsection (1), and that it is not a purpose in its own right at all, my worry is that there is no question of a balancing act. I am not trying to give any priorities to the balancing; I just want Natural England to be allowed to weigh sustainable development against other things, so that it features in subsection (2) as an issue that Natural England is allowed to consider. I am not trying to interfere with its weighting of the various factors. "Thereby", however, means that sustainable development is a spin-off; it does not mean that it is a purpose or object of Natural England at all.

Lord Carter: Before the Minister replies, surely we should also look at subsection (2). If we look at what the general purpose includes, we will see that almost all of it contributes to sustainable development.

Lord Bach: I agree with that last contribution. That is as true of subsection (2)(e) as it is of subsections (2)(a) to (2)(d)—which is the answer to the noble Viscount's question.

Viscount Eccles: Will the Minister provide us with a definition of "sustainable development"?

Lord Bach: If the noble Viscount will be patient, I will do that. I have an excellent definition from the philosopher John Locke, in the late 17th century. Alas, I do not have it with me, but I hope that I will have it after dinner. I will give him that definition and then, perhaps, a more modern definition. It is an important point.

Lord Tyler: During the passage of the Commons Bill, the Minister resisted all attempts to develop a definition of "sustainable agriculture". When he comes back after dinner, will he also explain to us why the Government failed on that account, but are nevertheless able to give us a definition of "sustainable development" this evening?

Lord Bach: Sometimes one has to make diplomatic choices, as I think the noble Lord will know. If I remember rightly, there seemed to be consensus around the Committee that it did not like the phrase "sustainable agriculture". Diplomatically, we then arranged that the Bill would be so altered that the phrase did not exist. That seemed to satisfy the noble Lord, Lord Tyler, and others. That is not to say that there was no definition of "sustainable agriculture". We need not be so diplomatic or generous on "sustainable development".

The Duke of Montrose: We have triggered a rather interesting little debate. I thank all those who have contributed. In particular, I draw the Minister's attention to the argument put by the noble Viscount, Lord Bledisloe, which is very involved.
	It is interesting how wording, as always, can be interpreted in different ways. The Minister tried to suggest that the wording we had put down was somehow going to weaken the Government's position towards sustainable development, whereas our intention was to strengthen the commitment of Natural England towards sustainable development. Given the complications that have arisen, and in the hope that the Government will look at some of these things in a little more detail, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon-Smith: moved Amendment No. 106:
	Page 2, line 5, after "enhanced" insert ", developed"

Lord Dixon-Smith: The noble Viscount, Lord Bledisloe, has highlighted the dilemma which prompted me to table this amendment and, more particularly, Amendment No. 112. The general purpose of the body we are at present calling English Nature seems to be looking backwards. It is conservation oriented; it wants to preserve. These are wholly laudable things. The one thing left out of the purpose is the possible effect of climate change and the need for finding solutions to that; to change the way that some things are done in the countryside and maybe, even—Heaven help us—to change the nature of the countryside itself.
	That is the reality which we increasingly have to face. It is not an easy one. It is very uncomfortable. If we do not find the solution to that problem, however, everything else written in this general purpose, frankly, becomes meaningless. The impact of climate change is not going to be sustainable. It is as simple as that.
	The noble Lord, Lord May of Oxford, in his debate on climate change, said—among other things in a very long, detailed and interesting speech—that carbon dioxide in the atmosphere may reach the levels towards which we now know we are pushing it, and remain there for an historically long period, and that when such an atmosphere last existed on this planet, the sea level was 300 feet higher than it is today. There may be an inaccuracy in that, and it may be two or three millennia away. It may be that we need not concern ourselves with what may be two or three or five millennia away. However, our successors will certainly be concerned—if, in fact, that is the problem. If we are creating a problem, they will not bless us if we do not start to look for solutions. That may well mean doing things not only to our urban communities, but to our rural communities and the countryside, and changing many aspects of planning along the way.
	I raise this because there has been an investigation by two very bright researchers—that is not my description, but that of the noble Lord, Lord May of Oxford. A paper entitled Stabilization Wedges – Solving the Climate Problem for the Next 50 Years with Current Technologies was published in Science on 13 August 2004, by Messrs S Pacala and R Socolow. It is a serious academic paper, but is also a very practical academic paper. It looks at the problem on a global scale. I raise it because it has some relevance to what we are discussing.
	Messrs Pacala and Socolow have looked at current technologies and asked what can be done with those technologies that will stabilise carbon dioxide emissions over the next 50 years and then possibly start to reduce them. They came up with 15 possible actions, any eight of which would stabilise carbon dioxide emissions. If all 15 were capable of implementation—and some of them conflict slightly with each other—we would begin to reduce carbon dioxide in the atmosphere. It is not my purpose to list all 15 because that would not be relevant to this debate. However, five of them affect the countryside in one way or another and I shall list those.
	The first is wind electricity. A deployment of wind electricity 700 times greater than the present global deployment, that is 30 million hectares, would provide an eighth of what is necessary to stabilise carbon dioxide emissions. That is a massive increase in contribution. We are behind some countries and ahead of others, but we are a developed country with above global average emissions of carbon dioxide per head and we must bear our share of the problem. That may mean more wind farms than we have at present even begun to think about and that will affect the countryside.
	We need many hundred times more photovoltaic electricity than the present deployment. It is possible that we can achieve that by using the roofs of houses, but such electricity will produce more energy per acre than plants. We may need to consider the possibility of industrial-type installations in the countryside. Biofuels are a countryside option and every farmer is hoping they are the answer to his prayers. They could make a daily contribution of 34 million barrels of ethanol. At present, that would take 250 million hectares producing 15 tonnes per hectare of convertible dry matter. That implies intensive agricultural production of a type that might not be deemed to be in the best interests of the beauty of the English countryside, except that the English countryside will start to change and may possibly disappear in the longer term if we do not find a solution. On this action, Pacala and Socolow comment that it could compromise global capacity for food production: I made that comment in this Chamber without having the authority of their studies behind me, and it is nice to see that.
	Another action, which is perhaps rather better, is forest management. Stopping the clear-felling of tropical forests and reforesting 250,000 hectares in the tropics or—this is where it could affect us—400 million hectares in temperate zones would be a huge increase in afforestation. If we play our part in that—and forests are beautiful and would be a great asset—it would be a dramatic change in the nature of our countryside if it were done on any considerable scale.
	The final action will perhaps make farmers in the House chuckle. It is agricultural soils management. It is called conservation tillage and will reduce carbon dioxide emissions if, as Pacala and Socolow comment,
	"it is proved to work as advertised".
	That will affect 1,600 million hectares.
	That is what will be required, or something like it, if we are to start tackling the issue of global warming seriously. Our share of these actions will inevitably have a dramatic impact on our countryside. Therefore, I thought it worth while tabling these probing amendments. The Government say that they are serious about global warming. But if we are serious about it, we cannot pretend that the English countryside will not be affected. It will be affected. Some people will regard some of the effects as adverse. It will be different countryside in 50 years' time. Otherwise, we will create problems for which our grandchildren's grandchildren will not thank us. I beg to move.

Baroness Miller of Chilthorne Domer: I shall resist the temptation offered by the noble Lord to get into climate change. Getting the duties of Natural England right in the Bill—and perhaps having a passing reference to the issues raised by the noble Lord—is critical. I shall give a couple of examples.
	In reply to some of the questions about tidal power, the last reason the noble Lord, Lord Sainsbury of Turville, gave for why we could not more seriously consider it was that it tends to have a sterilising effect on the seabed. That was raised as a negative issue. It is a negative issue, but it has to be balanced against all the options raised by the noble Lord, Lord Dixon-Smith. Secondly, at various times, English Nature and, I believe, the Environment Agency have objected to watermills in Devon and Somerset being brought back into use with turbines being sunk in rivers near them. Those agencies object for good reason because in the duties promoted when they were set up, this sort of issue was not at the top of the list, where it has now been put by climate change. The balance has changed. I am sure that in his reply the Minister will make some helpful remarks. I am grateful to the noble Lord, Lord Dixon-Smith, for raising this issue because time and again the primary duties of agencies are out of kilter with the urgency of the climate change issue.

Earl Peel: Perhaps I may briefly say how much I appreciated the amendment of my noble friend Lord Dixon-Smith because he raised something of fundamental importance. There is no doubt that we will have to experience and put up with change in the countryside in order to accommodate some of the problems the noble Lord mentioned. Without expanding on what the noble Lord said, because I think he put his case extremely well, I simply ask the Minister whether he thinks that Natural England's ability to deal with the issues the noble Lord raised is sufficiently wide in the Bill. That question really needs to be looked at.

Lord Judd: I too would like to put on record my appreciation for the immensely significant strategic points about our future that the noble Lord raised in the amendment. However, I would like to suggest to him that it seems to me that the wording on which the Government have settled gives this new authority the opportunity to do exactly what he seeks—to manage the countryside in the interests of sustainable development and the future. In doing that it would have to take the kind of pressures and realities, which were so well enunciated, into account.
	I am uneasy about inserting the word "developed" into the initial paragraph because the word "developed" is open to a great deal of subjective interpretation. There are many pressures for many different kinds of reasons to develop the countryside. If there were a primary duty on the new body to develop the countryside in the interests of our future, I suspect that that would play into the hands of people who could not be further from the considerations the noble Lord puts forward in his proposal. But I think that he might inadvertently be opening the door to a lot of pressures which are not strategically about what concerns him.
	Furthermore, I observe that of course those pressures will be there. I will be second to none in supporting them when appropriate, but that seems to be why in a way it is all the more important that this body should have very firmly in its sight its responsibility for conservation—not to prevent the development but to ensure that the arguments that are being put forward really are accommodated in the context of this priority.

Lord Rotherwick: I have great sympathy with the amendment of my noble friend Lord Dixon-Smith. I am not totally attracted to the word "developed", as the noble Lord, Lord Judd, said. I am not sure that this is a natural word for our English landscape. I am also not attracted to the word "enhanced", which I also have difficulty over.
	There are already very good examples around our landscape of climate change. Currently, oak is dying out substantially in some areas of the Cotswolds. Nobody knows for certain what is causing this but it is suggested that it is due to climate change. As it gets warmer, oak comes under more stress and subsequently dies. The word "enhanced" does not allow English Nature to recommend the planting of a different species, perhaps Mediterranean oak or the like. We are told that the beech of the Cotswolds, where I come from, will not survive a rise in temperature if the climate change, as predicted, goes ahead. Therefore, there needs to be some sort of wording to allow English Nature—or Natural England as it will become—to allow estates, farmlands, communities or whatever, to move forward and plant trees as an insurance policy, so that when the climate change comes along, we have trees left in our environment.
	I am also concerned about the word "enhanced", and I am interested in its definition. "Conservation" appears in the Bill before "enhanced". For instance, Clause 2, entitled "General purpose", subsection (2)(b), refers to,
	"conserving and enhancing the landscape".
	One has to question whether "conserving" or "enhancing" is more important. Often enhancing is not conducive to conserving—and I take "conserving" as meaning conserving that landscape in its historical state. Therefore, in the phrase "conserving and enhancing the landscape", I wonder which comes first. Does conserving come first and is it overarching over all the rest of them or can Natural England pick out as and when it wants which of those two words is more important? It would be helpful if the Minister could help us on what is really meant.
	In conclusion, the amendment ensures that this provision does what the Minister wants; that is, it gives a wide ability to Natural England to go forward and deal with our landscape, to protect and preserve it for the next generation. Being caught with this wording would, in my experience, tend to make its officers do something that is detrimental to the landscape and not what the caretaker of that landscape wants.

Lord Carter: I just say a word about the amendment in the name of the noble Lord, Lord Dixon-Smith. On this debate, and, indeed, on a number of debates we shall have on Clause 2, I am sure that my noble friend will remember the remark I made to him outside the Chamber about what happens when you have a general purpose clause—you have a series of mini Second Reading debates on the meaning of every single word in the general purpose clause. I think that the Minister now knows exactly what I meant.
	On the amendments, I do not think that Natural England—or, indeed, this Bill—is the right place for the function or the duty that the noble Lord has suggested. But, on the countryside and emissions, it is interesting to take a simple fact: if the acreage now used for set-aside were used for biofuels, it would provide all the fuel needed by British agriculture. That is sustainable development. In a sense it is already in the remit, although in practice that will be the result of the Renewable Transport Fuel Obligation, which I introduced with all-party support into the Energy Act. It would be the Department of Transport's job to see that that works. That is a good example.
	In Amendment No. 112, the noble Lord restricted himself to carbon dioxide emissions. The countryside is a major emitter of methane from livestock. So if you are going to look at carbon dioxide, you will have to look at methane as well. For all those reasons, this is a job which is way beyond Natural England.

Baroness Byford: I thank my noble friend for raising these two important amendments. All the amendments following the general purpose clause will overlap. It is impossible for them not to. The difficulty is that if you take them together as one batch, as I tried with my previous amendments, it becomes a nightmare. Noble Lords would get lost—certainly the Minister does not enjoy it very much at all.
	I will not repeat what my noble friend said. He has raised a very important issue. Whichever way you look at it—carbon dioxide, methane or light pollution—the question of pollution in the countryside and the way that Natural England will have to bear it in mind is very important.
	The noble Viscount, Lord Bledisloe, touched on the whole question of development. I fear that we shall keep returning to it. I make no apology that my noble friend has raised the issue, although the Minister will probably not like his words and not look at it. However, I have three questions as a result of his question: will Natural England be the lead spokesman—will its views take precedence over, for example, what the view of Defra may be on the issue raised by my noble friend? Where do the regional development agencies sit, because planning permission for future development will go to the regional development agencies? There is another issue there. My noble friend has raised an important issue in the broadest context, considering biofuels, biomass, microenergy, the use of combined heat and power and how we can get energy from waste.
	That brings me back to where the Bill sits, but also whether Natural England, Defra or the regional development agencies have the last say on the issue. It crosses so many departmental briefs; I should be grateful if the Minister would enlarge on that when he responds.

Lord Bach: I join in thanking the noble Lord, Lord Dixon-Smith, for instigating this interesting debate about very important topics. First, I shall deal shortly with Amendment No. 106, which he moved, which would add "developed" to the clause. We are not sure that that would add anything of significance. I shall come back to the noble Lord, Lord Rotherwick, in due course, but the phrase, "conserved, enhanced and managed" is very broad. Action of a developmental nature could be part of a conservation scheme, developing the measures that protect a rare species from further loss. It could be part of an enhancement scheme, restoring derelict land to make it attractive and accessible to local communities. Most of all, it could be part of the management of the local environment that encompasses a huge range of actions.
	From a purely presentational point of view—this point was made by my noble friend Lord Judd and others—we would prefer not to use the word "developed" as part of Natural England's general purpose. The development of the natural environment is associated in many people's minds—whether fairly or not—with built development. Although Natural England may be occasionally responsible for built development in the natural environment, using the term in its general purpose would not be the best way to tell people about its core purpose. Thank you for the debate on that, but we think that it is the wrong word. Perhaps the noble Lord agrees—I do not know.
	I turn to the heart of what the noble Lord was talking about, which is climate change and what is and what is not suitable to include in the Bill about that and the general purpose of Natural England. The amendment would make it clear that promoting countryside development that assists the limitation of carbon dioxide emissions to the atmosphere is part of Natural England's general purpose. I think that it is now a given, especially in this House, that climate change is not just vital but the issue for our generation. Of course, the Government expect Natural England, in common with all other public bodies, to play an active role in combating its effect.
	However, that is a very wide-ranging agenda, in which Natural England will not be the lead player. Who is the lead player is a more difficult question to answer. One must say, at the moment, the Government—the Government in the broader sense. Defra has a large role to play in climate change but, as the noble Baroness has implied, other departments have a role to play, so government is probably the best answer to that question.
	As a key element of the broader sustainable development agenda, climate change will be an important part in the context in which Natural England operates. There is no doubt that relevant action to mitigate climate change could fall within Natural England's general purpose. That is an important statement. However, it will approach it from the point of view of an organisation whose functions, powers and expertise lie in environmental management. As I tried to explain earlier, the items listed in Clause 2(2)(a) to (e) are a selection of what is contained within Natural England's purpose. Of course, the list could be much longer, but that would not necessarily increase its value as a means of clarifying its role in conserving, enhancing and managing the natural environment—again, a point that my noble friend Lord Judd made. So the amendment would not help to clarify the issue.
	The noble Earl, Lord Peel, asked a question to which the answer is yes. He will of course remember what his question was.
	On whether the approach in the Bill is wide enough, the consequences of climate change for the natural environment will be core business for Natural England. The overall aim of reducing carbon emissions will be an aspect of sustainable development that Natural England will consider in pursuit of the existing wording. Many noble Lords have emphasised the importance of the independence of Natural England. I now return to subsection (2). The current wording of sustainable development in subsection (1) strikes the right balance between guidance from statute on priorities and the great need to allow the board of Natural England to decide its priorities as an independent organisation.
	I have done my best to answer who is responsible for climate change. Local authorities, not the regional development agencies, give planning permission and are key bodies. There are 388 of them, which emphasises that all public bodies have a role to play. I do not think that I need to go into the exact wording of the amendment and whether it is suitable in the context of the Bill.
	On conserving and enhancing, the definition of those words is that conserving means protecting from harm or destruction. Natural conservation, set out in Clause 30, means the conservation of flora, fauna, geological or physiographical features; while enhancing has a different meaning, which is to improve the quality, value or extent of something. No doubt we shall return to that in due course. Once again, I thank the noble Lord.

Baroness Byford: Before my noble friend returns to the matter, I understand that the Rural Development Service, as part of Natural England, will be involved in considering the issues raised by my noble friend. I understand that the Rural Development Service is at present regionally based. That was the reason for my question about regional planning. I accept that local authorities have the say, but on big matters, such as wind farms or other future developments on what I would call economically viable energy producers in future, the Rural Development Service may well have an input in future. It may be able to grant money through agri-environment schemes or any future funding. That would be regionally based, which is why I raise the issue.

Viscount Ullswater: Before the Minister answers, there is one issue that needs to be tackled. The Government have a renewable energy obligation of 10 per cent by 2010. With present technology, it seems that the only one on the market is wind energy. Natural England's duties, as outlined in this general purpose clause, are of "conserving and enhancing the landscape". Will the Government listen to Natural England about its concerns for "conserving and enhancing the landscape"? Many of the areas where wind farms are to be developed are the most sensitive areas of landscape. Or will the Government decide, through the Department of Trade and Industry, that wind farms, in order to fulfil the energy obligation, have to be put somewhere and that, therefore, they can override the primary duty of Natural England and the comments that it might make when a wind farm goes to inquiry? The bigger wind farms will obviously go to inquiries and the inspector will report. Natural England will have an opportunity to make its views known. If it is following exactly what the Minister has just said—improving and managing landscapes—to suddenly find 26 rather large wind turbines stuck on a ridge is very difficult to square with the improvement of a landscape. I would be most grateful if the Minister could answer my conundrum.

Lord Bach: I would like to think that I could answer the noble Viscount's conundrum, but I am not sure that I can. Of course, Natural England's role of managing the natural environment as well as enhancing and conserving it would be clear. As I understand it, Natural England would have to make up its mind and would give its evidence at any appropriate planning inquiry about such a proposal. One of the issues that it would have to decide would be where the balance lay, which is not a decision that one would envy it necessarily. I do not know whether that goes anywhere towards answering the noble Viscount's conundrum, but I do not think that there is a simple answer. Perhaps I missed the point.

Viscount Ullswater: It does, but I think that that is a given. At any inquiry, Natural England will have to make its mind up and give its opinion. I was asking whether Natural England would have any influence on the Government's thinking in the decision-making process. Is there joined-up government or do the Government take decisions in various boxes and then, depending on the needs of one particular box, decide that they can overrule a very important advisory body?

Lord Bach: Of course, Natural England's opinion would be of great importance, but there are legal procedures for planning applications. Presumably, the inspector who heard the application would have to make a judgment on where Natural England's evidence or views fitted in. As I understand it—I am certainly no expert on planning law—the Minister, in a very substantial case, would have to make up his or her mind on which course to take. Through that process, Natural England would play an important role.

Lord Dixon-Smith: I am most grateful to everyone who has taken part in the debate. I am grateful for the general support of the noble Baroness, Lady Miller of Chilthorne Domer. The noble Earl, Lord Peel, asked whether the definitions in Clause 2 are sufficiently wide. My concern is that they are not. I have put these amendments down with the specific intention of initiating this debate. I hasten to say to the noble Lord, Lord Judd, that I am not wedded to one particular word or a particular wording in the clause at this stage. I am wedded to the issue, however, and I think that we need to give some very serious thought to how we deal with the matter. That general proposition has been supported in various ways by other Members of the Committee.
	I am particularly exercised about this because the Minister said that the Government are the lead player. Therefore, while Natural England naturally has a role, about which the Minister made some very positive remarks, the Government are the lead player. My particular concern is that the Government may be the lead player, but at present they are not playing. They initiate one study after another. Decisions go from deferral to delay to further deferral, and so on. There comes a point where they have to start taking action. My question is whether this is one of those points. I seriously suggest to the Minister that it is. This is not a point which will cost the Government any money or anything other than marginal loss of face because they think that their Bill is perfect and perhaps it is not. That is insignificant in relation to the issue that lies behind these amendments.
	I hope that the Minister will agree to further discussions on this issue to see whether we can square this conundrum rather better than the Bill does at present. If the Minister agrees to that, I shall go away very happy. Otherwise, if we cannot even discuss the issue, I shall conclude that I will have to put another amendment down. It may not be satisfactory, but we might need to be rather more positive about the way in which we push it. I accept completely that there is general agreement on the need to tackle the issue which I have raised. The last thing we want is to start debating that again today. But I am not convinced that this is yet another time or occasion when we do nothing. If the Minister would agree to discussions to relieve me of that worry, or possibly to find a form of words on which we could both agree, that would be enormously helpful. If he cannot agree to discussions, I shall know what to do.

Lord Bach: I never refuse discussions with the noble Lord.

Lord Dixon-Smith: I am most grateful. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Chilthorne Domer: moved Amendment No. 107:
	Page 2, line 6, leave out ", thereby contributing to sustainable development"

Baroness Miller of Chilthorne Domer: We have had quite a discussion already on Clause 2. My Amendments Nos. 107, 118 and 121 sit within that clause. I do not intend to go back over some of our discussion, but the extent of the discussion means that there is a general mood in the Committee that we are not happy with the form of words in that clause, although some of the Minister's replies and definitions have been extremely helpful. I will read them carefully. Nevertheless, I should like to point out one inconsistency at least with regard to the phrase,
	"thereby contributing to sustainable development",
	in line 6, which I suggest we leave out. There is a question that even if you preface the word "development" with the word "sustainable", development is not always desirable. It may not even fit within the first phrase of that clause. It just sounds better if the word "sustainable" is put in front of the word "development". But it is clear there what the Government's intention is for Natural England.
	In Clause 33, page 11, where the Government talk about the JNCC, there is an inconsistency, because the JNCC shall have only "regard to" but not a commitment to sustainable development. The Minister in another place, Jim Knight, said that the phrasing was carefully chosen so that the JNCC could set its advice in the context of sustainable development without having to moderate it in order to take into account socio-economic factors. That is rather different from Natural England, and at this point I simply ask the Minister to dwell on the issue and perhaps come back to that when later we consider the clause in its entirety.
	Amendment No. 118 suggests that after the word "recreation" in the list of purposes, we should insert the words "contributing to sustainable development". An awful lot of recreation could be classed as far from sustainable. I use a shorthand way to explain to the Committee what I mean by this. That would be recreation of the Jeremy Clarkson kind. I cannot call that sustainable, and I am sure that we need some refinement here.
	Amendment No. 121 would insert a new paragraph to cover the protection of the "nature" of rural areas, thus, "contributing to sustainability within them". The amendment explores the relationship between the protection of the landscape and the need for rural areas to have a living and working nature. I believe that we should think about the nature of rural areas rather than consider exactly what they contain. It is at that point that I begin to have a problem with the word "conserving". We need to get a feeling for the nature of an area in the round without necessarily having to conserve in aspic every single aspect of it.
	We have moved on considerably in this area. I recall that the noble Lord, Lord Whitty, who is in his place, spent a considerable time explaining to the House what the word "sustainability" means. It might have been the noble Lord who perhaps four or five years ago first used the phrase, "the three-legged stool of sustainability". Today we have at least a general understanding of what the term means, but I believe that we could go further towards an exact definition. It is important for the reasons put forward by noble Lords who have spoken in the debates on the last few groups of amendments. I beg to move.

Viscount Bledisloe: I am convinced that the solution proposed by the noble Baroness, Lady Miller—that of removing the reference to "sustainable development" in subsection (1) and including it as one of the purposes under subsection (2)—is the answer to the problem that I raised earlier. I would be extremely happy if this proposal were accepted. Indeed, unless it is accepted, the Minister's entire statement that it is for Natural England to balance the various issues and come to a sensible conclusion will be defeated because it will not be able to take sustainable development into account as a factor in what is in the best interests of the natural environment. I will be very unhappy if the Minister does not say that he will take the proposal away and think about it carefully.
	If my interpretation of subsection (1) is too harsh or wrong, moving the phrase to the place suggested by the noble Baroness can do no harm. If, on the other hand, my construction is right, failing to move it would absolutely defeat the entire balancing exercise of the Bill. I look forward to hearing some encouraging words from the Minister.

Lord Dixon-Smith: I support the noble Baroness in her amendment. I do not need to go over the ground because I have made the case already. But including the phrase at this point is not at all helpful to the Bill. I would be happy to see it moved.

Lord Cameron of Dillington: In speaking to my Amendment No. 119, I should like to emphasise first that I totally support the view that Natural England should be a body focusing on the management of the environment in its widest sense: an "environmental champion", to use the words of the Minister. However, in order to be successful, Natural England will have to persuade others. The body does not own much land and that for which it has management agreements is also limited. So in order to be successful, it will have to persuade others to champion the environment. To do that, Natural England will have to promote the sustainable development agenda and be seen to do so in the widest sense.
	Land managers and the general public can understand the links between landscapes and attracting visitors and businesses. They can understand the links between the wonders and diversity of the natural world and our long-term quality of life. But in all this they need to feel that a balance is held between, say, at one extreme saving every invertebrate in the country, and at the other their own social and economic well-being. I do not think that Clause 2(2)(e) achieves this at present. It is all right as far as it goes, but by limiting Natural England's sustainable development responsibilities so that they apply only through its management of the natural environment, I start to worry.
	Natural England will have to work in partnership with other land managers in order to achieve its objectives. It must understand the essentials of current land management survival, particularly where its new responsibilities for landscape are concerned. Most land managers now have to create new, often non land-based, enterprises on their land or in their communities in order to fund the management of their land. This trend can only increase over the medium term as the single farm payment reduces or disappears as we move towards 2012 and beyond.
	In many ways, the original form of Clause 2(2)(e) ought to read the other way round; namely,
	"contributing to the management of the natural environment by the encouragement of economic and social well-being".
	That might have done as an amendment, but perhaps the "encouragement" of economic and social well-being is going too far for what is, after all, only a conservation body. However, Natural England now has responsibilities beyond the management of the natural environment. It has to promote access to the countryside, it has to promote learning and understanding, and it has to conserve and enhance the landscape. Thus it seems logical to me that somehow its sustainable development remit should also be extended beyond the natural environment.
	The body has certain responsibilities towards national parks, where under the relevant legislation national park authorities already have a duty positively to foster economic and social well-being. Surely, unless the bodies more or less coincide, it would be difficult for that particular partnership to work as effectively as it should.
	In that context, I worry about the sustainability of the upland landscapes that we cherish in our national parks. Hobhouse's original intention was that "established farming must be protected". But now with the single farm payment, and thus the almost positive encouragement in upland areas of the option not to farm, hill farming by itself is unlikely to be the economic, social and environmental driver it used to be in many of our upland areas. The consequences of this for conservation, recreation and local communities could be disastrous. So it seems that Natural England will have to become involved in social and economic development as part of its primary responsibilities for conserving and enhancing the landscape. We should note that this involvement is unlikely to be through the natural environment, but more in consideration of its needs. It is therefore imperative that it has broader responsibilities for economic and social well-being than merely through the management of the natural environment. It is going to have to be much more imaginative than that.
	A further point to note is that Natural England will be required to give advice to the Government on everything from habitats to farming policy. While I feel sure that such advice, particularly that available from the current personnel, will almost certainly take into account social and economic well-being, the perception of the public in general and land managers in particular will be that this advice could be unbalanced without the introduction of this amendment.
	I want Natural England board members to be able to ask as often as possible whether the economic and social well-being issues have been considered. We are not asking for social and economic well-being to be encouraged or fostered, as in other legislation—or even to be contributed to, as in the amendment of the noble Baroness, Lady Miller—and certainly not for it to have precedence. As my noble kinsman the Duke of Montrose said a moment ago, sustainable development is a way of looking at things; it is not necessarily an outcome. We are merely asking for the management of Natural England to have regard to the economic and social well-being of rural areas in the same way as later in the Bill all public authorities, whatever their primary purpose, now will have to have regard to conserving biodiversity. It seems to me that what is good for the goose must be good for the gander.

Earl Peel: I support the amendment of the noble Lord, Lord Cameron, to which my name is added. As I said at Second Reading, the inclusion of paragraph (e) in Clause 2(2) as part of Natural England's general purposes allows for a presumption that the management of the natural environment will automatically lead to social and economic gains. I have no doubt that in some instances that might well occur but in other instances I suspect that quite the reverse could happen.
	I suggest—and this is a point that the CLA makes very forcefully in its brief on the Bill—that it is often the economic sustainability within rural areas which contributes to the positive enhancement of the natural environment. Natural England will undoubtedly be a very considerable force in the future. It will have great influence on rural affairs. So it is essential in my view that its role reflects that responsibility and that it has the confidence of its constituents.
	Of course I appreciate that Natural England's role—as the Minister himself put it—is to champion sustainable development; that is fundamental. I also recognise that it is not its function to actively promote social and economic development as such. But all this amendment seeks to achieve is that when pursuing its principal objectives it should simply have regard to the other essential strands of life; namely, social and economic development. That seems a perfectly logical consequence.
	I appreciate that some have made the point that it is essential that Natural England should at all costs promote environmental issues, and that there are also other agencies whose role it is to encourage economic development. But we should remember that bodies such as the regional development agencies already have sustainability as part of their remit. I forget who it was but a noble Lord asked the Minister for a definition of sustainability. I shall refer later to the Convention on Biological Diversity, which comes up with a definition of "sustainability" that I suspect the noble Lord will be happy with, bearing in mind that the British Government have signed up to that convention. It defines "sustainable" as,
	"the introduction and application of methods and processes for the utilisation of biodiversity to prevent its long-term decline".
	That seems a sensible definition. But that being the case, as I have said, this imposition is already there so far as the regional development agencies are concerned. So I argue that in view of the fact that it is already charged with promoting economic and social development to take account of biodiversity as part of its remit, it is hardly unreasonable to expect Natural England to have regard to economic and social well-being.
	Finally, the parliamentary briefing sent out by organisations prior to this evening's debate mentions, in regard to stakeholder engagement, a,
	"pragmatic approach to achieve our objectives in ways which avoid unnecessary social and economic costs".
	So I ask again: how on earth can that be achieved without Natural England having regard to the economic and social well-being of its constituents?

Lord Willoughby de Broke: I support the amendment in the name of the noble Lord, Lord Cameron. I declare my interest as a serial diversifier. I have just learnt to my regret but not to my surprise that growing corn now is really a loss leader. The report that I read said that it was not worth doing it. Growing corn has become an expensive pastime rather like skiing or shooting. The point I want to get across is that my diversification—the noble Lord touched on this point—pays for improvements to the landscape. I have a number of small developments in my farm buildings. I have about 12 units ranging from metal polishers to a micro brewery. They are very successful. Like many farmers, I am proud of what I have done on my farm to improve the landscape. We have dug a lake and ponds; we have planted woods and hedges and improved orchards. I pay tribute to the countryside stewardship scheme which has helped that process, both financially and with advice. However, all that is just a contribution; the main money that goes into improving the landscape comes from farm profits. At the moment the only way that farmers generally make profits is through diversification schemes. It is important, therefore, that the amendment reflects a better balance in subsection (2)(e). As the noble Lord, Lord Cameron, pointed out, the wording as it stands implies that the management of the natural environment brings social and economic well-being. That, of course, is not necessarily the case; it is rather the opposite, as he pointed out—that economic well-being will contribute to management and improvement of the natural environment. I hope that the Minister will take due account of the points made. The amendment, which I support, would greatly improve the balance of the clause.

Lord Judd: I declare an interest as the vice-president of the Council for National Parks and the president of the Friends of the Lake District, which represents CPRE in the whole of Cumbria, not just the national park.
	This debate is very important. I am sure that we would all very much like to put on record our appreciation for what the noble Lord has done to improve the countryside on his farm. However, I suggest that the people who have tabled the amendment are very honestly underlining an unnecessary difference which I believe the Government have sought to overcome with careful wording. The amendment suggests that we have all these beautiful qualitative things that we do in the countryside while somehow over here there is the real world of economic and social life, and that this new body must balance those two separate dynamics. What I think the Government have tried to say—for which I applaud them—is, "Let us begin to think of this as an integrated process in which, in the very management of the countryside for the qualitative things that we are concerned about, we shall be looking to the economic and social well-being of the area and the people who live in it. We must stop thinking of this potentially as a confrontation. It is something that we must start thinking about as an integrated, integral combination of different elements in the total situation".
	I have thought about this a great deal and I have a lot of sympathy with what has been said by those who have spoken to the amendment. However, I believe that the Government are taking us forward and bringing into the drafting a positive idea, which I support.

The Duke of Montrose: I speak now to the amendment standing in the name of my noble friend Lady Byford and myself. One cannot say that this has been a wide-ranging debate; it has been very focused. We are all tackling the one subject and chipping away at the same rock from different angles. Our amendment has some merit because it tries simply to put all three objectives into one sentence, thereby giving equality to them. Amendment No. 120 would add the word "environmental" to the social and economic well-being referred to in Natural England's remit.
	It is a probing amendment designed to find out why, as the Bill reads now, Natural England will not contribute in other ways to environmental well-being as well as social and economic well-being. I take some issue with a phrase as vague as "contributing in other ways" being included in legislation—perhaps the Minister can reassure the Committee on that front—and I would be very interested to know why environmental well-being was not included at that point.
	As I have said, the intentions laid out in the clause are impressive, but this small section appears to be an aspirational flourish which concludes the statement about Natural England's purpose. I would not necessarily agree with the lay-out of Clause 2 as I do not think it would be helpful to Natural England as an organisation. As it stands, it seems odd that Natural England's general contribution—albeit "in other ways"—does not include environmental other ways.
	I have received, as no doubt have others, a briefing in that vein from the Countryside Alliance. It states:
	"The general purpose of Natural England is to conserve and enhance the natural environment, but there can be no successful environmental policy without economic viability".
	Rather than tabling a new amendment, I think the Committee would like to hear the argument for the clause as it stands. I hope the Minister will be able to shed some light on what effect the clause will have.

Lord Carter: Although I have added my name to Amendment No. 119, I think we have got it wrong. In Amendment No. 119 we refer to,
	"the economic and social well-being of rural areas",
	and Amendment No. 120 also refers to the rural communities. But Clause 2(2)(e) says nothing about the rural areas. It refers to,
	"contributing in other ways to social and economic well-being through management of the natural environment".
	That is the wider remit of Natural England. I think we have got it wrong.

Lord Jopling: I was struck by one short comment by the noble Lord, Lord Cameron; he said that he thought that Clause 2 was "all right as far as it goes". I most strongly endorse that. It seems that many of us have been trying to pursue the aspirations already in Clause 2 for a very long time. If I might be allowed a moment of self-advertisement, Clause 2 almost exactly reflects the philosophy I had years ago when I was the architect, instigator and introducer of the environmental sensitive area schemes, which have done a great deal for certain rural areas. I refer to the Lake District and parts of the Yorkshire Dales, areas I used to represent in another place.
	The clause is all right as far as it goes but I strongly support Amendments Nos. 119 and 120 standing in the name of the noble Lord, Lord Cameron, and my noble friend Lady Byford. It is all right having these aspirations—other noble Lords have also made these remarks—but unless they are backed up by a rural prosperity they will be doomed to failure. Quite understandably and quite rightly, the noble Lord, Lord Judd, put his finger on the fact that there is very often a conflict between those interested in environmental matters and those concerned with economic matters. It is right to try to bring the two together, as he suggested, and the two amendments do exactly that. They introduce in Clause 2 the living together of the two aspirations: to protect and look after the landscape and, at the same time, to promote rural prosperity, which is by far the most effective means of creating what you want for the environment and the landscape.
	The noble Lord, Lord Cameron, spoke about the problems of the uplands. How right he was. I am sure that the whole nature of Britain's landscape will change with the changes going on in agriculture. That leaves aside what my noble friend Lord Willoughby de Broke said about the economic prosperity—or, rather, the negative prosperity—of growing corn. I declare an interest in that.
	I have always taken the view that the uplands are one problem but perhaps an even bigger problem concerns land which is just slightly too good to be included in what we used to call the upland areas, the less favoured areas. Land around the periphery of high land, and which is just slightly too good, is perhaps most at risk today. I have always been anxious about such marginal land. I was able years ago to introduce for the first time special financial assistance for farmers in those areas. With the changes, we are likely to see a bigger change in the countryside and the environment in those marginal areas which surround the uplands. I may be wrong but I fear that that is where we will see the greatest changes.
	My plea to the Government is that they look most sympathetically at Amendments Nos. 119 and 120 and, if they do not like them, try to find a way of blending the importance of rural prosperity into the aspirations of this new body.

Lord Bach: I shall be as quick as I can. This has been an important and interesting debate and, even though I cannot accept any of the amendments that have been moved or spoken to, I shall certainly take away the arguments that have been employed.
	We have just debated Natural England's role in contributing to sustainable development. I have said that Natural England would achieve this by promoting environmental outcomes which also seek to achieve social and economic benefits. Let me briefly outline what the clause does. Clause 2(1) sets out Natural England's general purpose and charges it with ensuring that,
	"the natural environment is conserved, enhanced and managed for the benefit of present and future generations",
	which is not a bad definition of sustainable development. This general purpose sets Natural England's activities within a sustainable development context.
	Clause 2(2) then elaborates on some of the activities which fall within Natural England's general purpose. As I have said before, it is neither exhaustive nor hierarchical but provides elaboration and continuity with existing legislation. It takes into account the purposes, as set out, of the three bodies that are coming into Natural England.
	The general purpose in subsection (1) sets the activities of Natural England in a sustainable development context, as envisaged in the rural strategy. I repeat that it will be primarily an environmental organisation, contributing to sustainable development through its management of the natural environment, actively seeking social and economic benefits in town and country—not just in the country—and avoiding unnecessary negative economic and social impacts. I therefore do not feel it would be appropriate to take the reference to sustainable development out of the general purpose clause, as Amendment No. 107 would do.
	Amendment No. 118 would add the words "contributing to sustainable development" to Clause 2(2)(d). It would be appropriate only if I were to accept that the phrase should come out of Clause 2(1), since the items listed in Clause 2(2) are examples of what is included in Clause 2(1). As I have made it clear that I am not attracted to leaving the phrase out of Clause 2(1), the amendment would add nothing. All the items in Clause 2(2), in paragraphs (a) to (e), are conditioned by the reference to sustainable development in Clause 2(1).
	Of course there are instances where it is necessary for access to the countryside and open spaces to be managed carefully. Natural England will have an excellent pedigree in this respect. It will combine the Countryside Agency's experience in promoting positive access management in conjunction with local access authorities and in administering legal restrictions on CROW access where necessary with English Nature's experience of advising the agency on the need for nature conservation restrictions and enforcing by-laws on its national nature reserves. I hope that noble Lords will agree that all the Natural England agencies have done terrific, excellent work to date in promoting and managing access to the countryside and that they are well placed to undertake this work even more effectively as a single integrated agency.
	Amendment No. 121 suggests adding a further paragraph (f) to the list in Clause 2(2). It would add the words:
	"protecting the nature of rural areas and contributing to sustainability within them".
	That is already covered by the broad and enabling general purpose. It is important that the board of Natural England is able to come to its own view on where its priorities lie. As I said, it will listen to both rural and urban communities, review the evidence and then decide, in discussion with Ministers, what needs doing and where. It is not necessary to make a specific reference to rural areas.
	Amendment No. 120 would add the environmental well-being of rural communities to the economic and social contribution that Natural England should make. It is unsatisfactory in a number of ways. In effect, it would make this paragraph refer to sustainable development—economic, social and environmental—which repeats the reference in the general purpose, though with an emphasis on rural communities. It would undermine the reason for having this clause, which is to clarify Natural England's role towards social and economic issues relative to its core environmental activities.
	Amendment No. 119, in the name of the noble Lord, Lord Cameron, would require Natural England to consider the impact of its policies and actions on the economic and social well-being of rural areas. It would invite Natural England to be challenged periodically, or on a case-by-case basis, to show that it had regard. But "having regard" does not require Natural England to take any specific action. We are clear that Natural England will be an environmental organisation. That is calculated in its purpose, powers and duties, and will no doubt be reflected in its expertise. As I said, the general purpose sets Natural England's activities within a sustainable development context. Subsection 2(e) makes it clear that when considering the many ways in which it might contribute to sustainable development, Natural England should think about how to contribute towards social and economic well-being. The Explanatory Notes, which have been incorporated into Natural England's management statement, to give it longevity, explain:
	"The reference . . . to sustainable development indicates that Natural England is meant to seek solutions which, while achieving environmental benefits, also provide long-term economic and social benefits and avoid untoward economic and social impacts".
	We believe that, taken together, this package of references in Clause 2(1), Clause 2(2) and the Explanatory Notes is better than requiring Natural England to "have regard to" social and economic issues. Our view is that "having regard to" something is passive. It is too easy a test to pass. It may smack a little of the old thinking of trading off one benefit against another, either environmental or socio-economic. We have incorporated a positive test that Natural England should seek integrated solutions which meet its environmental and its social and economic aims—what we would classify, perhaps rather grandly, as true sustainable development. As I said, there are requirements for Natural England to have regard to urban as well as rural environments.
	With the most enormous respect to the noble Lord, Lord Cameron, and others who spoke in favour of his amendment, I pose this question: would the noble Lord prefer to ask Natural England, at the end of any given year, "Show me how you have had regard to social and economic well-being" or "Show me you have sought solutions which, while achieving environmental benefits, also provide long-term economic and social benefits and avoid untoward economic and social impacts"? We believe that a further attraction of our formulation in the Bill is that it applies to all of Natural England's work, not just that which might benefit people living in rural areas.
	I shall try to deal briefly with a number of other issues which were raised. I say to the noble Lord, Lord Cameron, that Natural England will be one of many advisers. Its own focus will be on the natural environment, while the CRC and the RDAs will advise on social and economic issues—and, indeed, champion them—or work in a sustainable development context.
	The point was made that Natural England must have primary responsibility for social and economic development. By way of example, the uplands were mentioned. We do not think that that is right. My noble friend Lord Haskins recommended that land managers and others were confused by the Countryside Agency having responsibilities for both the environment and social and economic development. We agreed with his recommendation that Natural England should lead on the natural environment but also try to achieve social and economic goals. The RDAs should lead on social and economic development, while also trying to achieve environmental benefits.
	The noble Duke asked about the "other ways" mentioned in Clause 2(2)(e). While Natural England approaches this responsibility from an environmental point of view, it should not feel too constrained by that when considering innovative ways in which it can integrate social, economic and environmental benefits.
	The noble Earl, Lord Peel, said that Natural England should have the same duty to social and economic aims as RDAs have towards environmental aims. We think that the Bill goes further than this. Rather than simply "having regard to", Natural England will be required to seek solutions which, while achieving environmental benefits, also provide long-term economic and social benefits and avoid untoward economic and social impacts.
	Finally, the noble Baroness, Lady Miller, talked about the JNCC and Clause 33. The JNCC has very narrow terms of reference—to give scientific advice across the United Kingdom and at the international level. We believe that the wording in Clause 33 reflects that narrower purpose.
	I have been as quick as I can in replying to this important debate. We will consider what has been said.

The Duke of Montrose: There is one point that I would like to put to the Minister. The purposes that are outlined there deal with promoting access to the countryside and open spaces and encouraging open-air recreation. The fact that we might want to mention the economic and environmental well-being of rural communities is in some ways a balance to that, for those who are concerned about those things, without trying in any way to denigrate the importance of the urban environment.

Baroness Miller of Chilthorne Domer: I thank all noble Lords who have spoken in this debate, especially the noble Viscount, Lord Bridgeman, and the noble Lord, Lord Dixon-Smith, who supported my amendment. It is likely that we will come back to this on Report and discussions between now and then would be helpful. It is not for the board of Natural England to decide on the general purposes of Natural England, though the Minister said that it was for it to decide on the priorities. He is absolutely right for it to decide that. However, it is up to us to decide the general purpose. The general mood of the House is that rural areas should have a particular mention. I hope that he will bear that in mind when he redrafts small bits of the provision. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 108 to 110 not moved.]

Baroness Farrington of Ribbleton: This may be a convenient moment to break. May I suggest that the Committee stage begin again not before one minute past nine o'clock? I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.

Artist's Resale Right Regulations

Lord Sainsbury of Turville: rose to move, That the draft regulations laid before the House on 15 December be approved [20th Report from the Merits Committee and 14th Report from the Joint Committee].

Lord Sainsbury of Turville: These regulations will implement European directive 2001/84EC on the resale right for the benefit of the author of an original work of art, as required to meet our obligations under European Community law. Throughout both the negotiations on and now the implementation of this directive, there has been one factor that we have kept uppermost in our minds: the UK has a thriving art market which makes a significant contribution to the UK economy. The Government are committed to ensuring that that remains the case. We are determined, and have been throughout the negotiation, that our implementation minimises any risk of sales being diverted from the UK to countries where the right is not currently available. The choices that we have made in this implementation do, we believe, secure this important objective.
	However, we also recognise the value and importance of encouraging visual artists, many of whom struggle to earn a living from their art. Artists, unlike composers of music, for example, have less opportunity to make a return on their creative effort by receiving a copyright royalty income from sales of large numbers of copies of the original work. And of course the value of the original creation can rise with time as the reputation of the artist grows. But without the resale right the artist gets no benefit from such increases in value once he has sold the artwork to someone else.
	Our implementation has balanced the needs of both groups, making use of key concessions to protect our art market while providing benefit to the artist and minimising the administrative costs involved in collecting royalties. In each case we have ensured that we have not gone beyond the directive and that the principles of reducing burdens on business through better regulation are met while rewarding the creativity of artists. I am aware of the report of the Merits Committee of this House, but I believe that it did not consider the impact on artists in its remarks.
	Today I will be explaining some of the detail of the directive and its implementation in the UK. But I would like to start by stressing that we have carefully considered all evidence available to ensure a balanced and workable implementation. We have undertaken extensive consultations, both formal and informal, with representatives of those who will be affected. We have had over 140 responses to our consultation. We also commissioned independent economic analysis on the impact of resale right and have closely monitored the implementation in other EU countries. We have had many meetings with relevant collecting societies and representatives of the art trade when making the final decisions.
	During negotiation of the directive, the UK Government secured a number of concessions to protect the UK market. The first was the cap on royalties, at €12,500. The original proposal contained no such cap, which would potentially have penalised our successful artists and damaged our art market by diverting sales.
	The second key concession that the UK successfully negotiated concerned the length of time for which the resale right applies. In many member states which already have the resale right this lasts for the full term of copyright protection in the work of art; that is, the life of the artist and 70 years after his death. Our current implementation of this directive only delivers the right to living artists as that is what will stimulate creativity. This is possible as a result of a derogation we secured permitting the UK to delay application of the right to works by deceased artists until at least 2010. We also have the option of making a case to the European Commission for a further extension until 2012. Works by deceased artists make up the most important and valuable sector of the UK art market and it is vital that we allow the market as much time to adjust to the changes as possible. This was a hard-fought concession for the UK. We are using our derogation and will make a case for its extension.
	The final concession that the UK secured was an obligation on the European Commission to enter negotiations to make the relevant article of the Berne convention compulsory worldwide. Unsurprisingly, to date, that has been unsuccessful. In view of that we will seize the opportunity of the scheduled review of the directive to press for the derogation for deceased artists to be made permanent.
	In addition to these key concessions, a number of options are available to member states within the directive. I will now outline the most important decisions that we have made in formulating these implementing regulations.
	Member states are permitted to set a threshold on the sale price. Sales of work below this threshold would not be eligible for resale right. The maximum allowable threshold is €3,000. However, setting this threshold at €1,000 will greatly increase the number of UK artists who will receive royalty payment. In 2003, 998 works by living artists were sold at auction for over €3,000. Setting the threshold at €1,000 would have encompassed 770 more sales; 88 per cent of these works by living British artists. Many of the additional artists to benefit from a lower threshold are on very low incomes or are just starting out in their careers. A lower threshold would also allow a wider range of artists to benefit from resale rights. Works of sculpture, illustrations and cartoons which are also covered by the directive rarely resell for as much as €3,000.
	In making a decision on the threshold, we have, however, looked very carefully at the likely impact on location of sales, specifically the risk that sales might be diverted to other countries. It is extremely difficult to envisage any circumstances where for sales of €3,000 or less the costs of relocation will not exceed any royalty payment due. Indeed, there is a general consensus, supported by independent economic analysis, that lowering the threshold will not increase the risk of diversion of sales from the UK.
	The major concern regarding these sales is whether the benefit to the artist justifies the cost to business in processing payments. The royalty payments on low value sales will be small and we must balance this against the administrative burden that will be placed on business. We were provided with a detailed proposal for the administration of the right by a relevant collecting society. This estimated that costs to business could be as little as £1 per transaction; all additional costs would be covered by the collecting society.
	While these figures were disputed, we never received any substantiated evidence relating to costs from the art market's representative body which challenged these figures, though we asked them to do so if they believed they were wrong. The figures may be a slight under-estimate of the true costs but we believe, on the balance of evidence, that costs will be in this order of magnitude. This is supported by independent economic analysis. A threshold below €1,000 could not be justified as at that point the administrative burden would almost certainly be disproportionate to the benefit to the individual artist even with the benefit of a collecting society.
	A further key decision I wish to outline concerns the collection of royalties. The directive allows us to provide either optional or compulsory collective management. After considering all responses to our consultation and the evidence put forward regarding administrative costs, we have decided to provide for compulsory collective management. This means artists will be able to receive their royalties only through a collecting society and will not be able to claim them directly. Although this reduces the artist's choice in managing their rights, and is unusual is the field of copyright, a number of independent studies on resale right show that the cost to business of administering the right is significantly reduced when compulsory collective management is adopted.
	Compulsory collective management will provide the art market with a very limited number of contacts points, which will co-ordinate collection and payment of royalties. If artists were free to manage their own rights, the art market could be inundated with separate requests for individual sales information. These could be made at any point up to three years after the sale had taken place. Art dealers would have to retain the royalty payment for up to six years in case a claim was made. They would also be unable to determine easily whether the artist was eligible, or even alive, without creating and maintaining their own databases. A collecting society will easily be able to provide evidence of eligibility and create an efficient collection method. This will reduce the burden on business. Indeed a number of businesses, particularly smaller art dealers, specifically requested compulsory collective management in response to the Government's consultation and during informal consultation.
	Royalties are calculated on the basis of a tapering scale of percentages applied to price bands of the sale price. The majority of these are fixed within the directive but the UK can choose to set the rate on the first price band of up to €50,000 as either 4 per cent or 5 per cent. Selecting the higher rate would increase royalty payments on lower value works, and would therefore provide more benefit to artists. However, this would increase royalties on all sales up to the cap, and therefore increase the number of works for which it might be considered worthwhile relocating the sale from the UK. The Government cannot accept any increase in the risk of diversion of sales and therefore we have set the rate on the lowest band at 4 per cent.
	As I have already said, resale right is an entirely new right within the UK. We will therefore be carefully monitoring its impact. An EU review of the directive is scheduled to take place in 2009. We will commission further research during this period to determine the true effect that resale right has had on the UK art market to enable us to feed into the review process. This will arm us with invaluable evidence to consider with our colleagues in Europe whether any amendments to the directive should be made. At this stage the Government will press, too, for the derogation for works by deceased artists to be made permanent.
	Our implementation represents what we believe to be the most sensible and balanced option available. It takes account of all views expressed during our extensive consultations. We have made use of all options to minimise diversion of sales from the UK, thereby protecting our art market. We have also ensured that administration costs are kept to a minimum, while providing a right which will benefit as large a number of British artists as possible. I commend these regulations to the House. I beg to move.
	Moved, That the draft regulations laid before the House on 15 December be approved [20th Report from the Merits Committee and 14th Report from the Joint Committee].—(Lord Sainsbury of Turville.)

Lord Brooke of Sutton Mandeville: rose to move, as an amendment to the above Motion, at end to insert "but this House regrets that the regulations go beyond the requirements of the European Union directive implementing the regime for the payment of artists and calls for the regulations to be replaced within six months by regulations in accordance with the directive".

Lord Brooke of Sutton Mandeville: My Lords, I am grateful to the Minister for setting out the draft regulations as he has. The Government's original estimate for the time that this debate will take was 45 minutes, but I think that may turn out to be an underestimate, and I hope that the House's temper is not affected by the late start.
	In moving my amendment, I should declare an interest that one of my sons is a self-employed letter-cutter and stone-carver and that I am and have been for the 10-year period of this saga the only president that the British Art Market Federation has had. Henceforward I shall refer to the federation as BAMF. It pays me a small retainer not of my seeking to enable members of BAMF to feel free to telephone me when they wish. BAMF was set up in 1996 in response to a request by the DTI and has welcomed the chance to work closely with Her Majesty's Government. Relations have been good over the decade; it is the set-back to those relations, arising from the precise terms of the draft statutory instrument, that has been criticised to a greater or lesser degree in recent days by the Economic Development, Culture, Sport and Tourism Committee of the London Assembly, on the "Channel 4 News" last Wednesday, on the "PM" programme on the BBC on Saturday and by the first Times leader yesterday, that gives rise to this amendment.
	The Merits of Statutory Instruments Committee of your Lordships' House, to which the Minister made reference, thought that the Government's wording afforded potential for such an amendment, especially given that the regulations create an intellectual property right previously unknown to UK law.
	BAMF appreciates that the regulations are a necessary consequence of the EU directive. BAMF has always been loud in its praise for the Government's robustness in the national interests during the five years of the negotiations of the directive, between 1996 and September 2001. The Government's opposition to the directive was based at the top end, on the likelihood under the directive of significant sales previously conducted in London moving outside the EU to markets where droit de suite does not apply—notably Switzerland and the US; and, at the bottom end, on a low threshold for the resale right imposing new costs of business quite disproportionate to the putative benefits that artists would receive.
	The Government's original objective, in line with those policy criteria, was to set the threshold at €10,000. The reason why negotiations took five years was that the Government, vehemently opposed to the draft directive, unless there were a level global playing field that would thus avoid damage to the EU and UK markets, constructed a blocking minority composed of Austria, Ireland and the Netherlands, which, like ourselves, neither had nor desired droit de suite, combined with Denmark, Portugal and Sweden, which already had a resale right and favoured a directive but was sympathetic to our concerns. There was some political cost to the latter three countries in supporting us, so it was inevitable that the blocking minority would not hold out indefinitely; but significant concessions towards our case were secured in the process in the Internal Market Council.
	The Government, in a way that the rest of the EU admires, maintain solid cross-departmental unanimity, which had the Prime Minister's consistent, active and effective support. They secured a €12,500 cap to droit de suite individual payments, as the Minister has said, and achieved the derogation till 2010, extendable to 2012, whereby royalties will accrue only to living artists.
	On the minimum threshold, the directive was eventually unanimously agreed in the Internal Market Council at €4,000. It fell to €3,000 in the conciliation process with the European Parliament, which was urged on by the commission, so hostile to our case that it issued a press release condemning the concessions that had been made to us. The Government had already, most unusually, threatened the use of the Luxembourg compromise. To demonstrate their reaction to being asked to vote on a final threshold a third lower than the council had unanimously agreed prior to conciliation, the Government then, even more unusually, voted against the directive's final text. That took five years, leaving Her Majesty's Government at least four years to publish this draft statutory instrument, with a further three months to spare for everyone to prepare for implementation once they had the Government's precise interpretation of the directive for British purposes.
	The Patent Office commissioned unpublished research, now known as the Leeuwenburgh study, of the likely working of droit de suite. After two and three-quarter years, the Government had effectively reached agreement on the application of the directive, with BAMF on the one hand and the Design and Artists Copyright Society, henceforward referred to as DACS, on the other. As late as mid-February last year, the consultation document issued by the Patent Office retained a threshold of €3,000. The Minister, in giving evidence to the inquiry into the art market by the Commons Select Committee on Culture, Media and Sport, said the following month—that is March 2005—that applying the level below €3,000 would mean that,
	"The administrative costs become an absurdly high proportion of the actual payments which will go to artists".
	Both BAMF and DACS replied to the consultation. An effort by DACS to discuss administrative costs collectively with auction houses and dealers was foiled by the Government's competition laws, but individual auction houses and dealers invited DACS to come back for individual talks—invitations which the society did not take up. Those talks would have been devoted to the technical problems of setting up the systems.
	The Select Committee inquiry was perhaps constrained for time by the distant thunder of the election. It was on the broad subject of the art market; it lasted for 11 weeks in all. Witnesses were given brief deadlines to produce written evidence, which had to be produced before the consultation document had been published. The time allotted to oral evidence within those 11 weeks was a single morning. During that evidence on 8 March, the chairman of BAMF, Mr Anthony Browne, drew attention to the unpublished research commissioned by the Patent Office and suggested that the Select Committee should look at it. There is no prima facie evidence from the Select Committee report that it did so, but it did recommend reducing the threshold to €1,000.
	I am not clear precisely when the Patent Office commissioned a second study, now known as the Graddy and Szymanski report, but it was published in October 2005. Its evidence essentially confirmed the facts of the earlier study. In early September, a month earlier than the publication, BAMF was expecting to be shown the draft regulations for final comment. That offer was withdrawn, perhaps because they were not yet ready. The Government were then nearing the deadline of 1 October for publishing the regulations, by now four years in gestation, to allow three months for market preparations based on the final text. The Minister did not seem wholly aware of that time pressure when the chairman of BAMF and I visited him on 18 October.
	Be that as it may, BAMF was asked at the end of September to amplify the estimates of administrative costs that it had submitted in the consultation phase. That was requested as a response to a DACS estimate, later quoted by Graddy and Szymanski, of between 43p and 56p per sale—which the Minister has translated as £1—in quarterly submissions. BAMF explained that it could do no better than before unless it saw the final text, since the specific demands on its members would be contained therein. One auction house within five days did illustrate the price that had been paid in DACS's not taking up the invitation to meet them to discuss the technical problems. I cite a handful.
	In DACS's argumentation, it took responsibility for the calculations, and cited the details of a single auction sale that that auction house had conducted. The auction house identified a 6 per cent error rate by DACS in the calculations, and explained to the Patent Office that the market would have to make its own calculations; it could not rely on those by DACS, not just because of that but because it could secure no indemnity against DACS's mistakes or failure to inform, especially as claims could be made up to three years later, long after the auction house had paid out its vendor's proceeds. Its confidence had not been encouraged by DACS's assumption in its calculations that droit de suite would be charged on the buyer's premium, nor had DACS allowed for the myriad of ways that auction houses allow their bills to be paid while buyers may default or procrastinate.
	Since the draft regulations were published—of course with their decision to set the threshold at €1,000, to insist on both agent and vendor responsibility, and to impose compulsory collective management, which I believe is unique in the European Union—highly respected dealers have tried checking out artists whose works they handle against the DACS website. They have found it, at this stage, impossible to do so. The Graddy and Szymanski report stated that the art market had claimed costs of £30 to £40 per transaction, which is in line with Leeuwenburgh's figures of £28 to £38. It also quoted him as giving figures of £6 per item under compulsory collection and £11 under voluntary schemes. Those were in fact the lowest individual figures he received in a survey that he conducted, but the highest went as far as £50. The spectrum from 43p at one end to £50 at the other makes it crucial to know, and I therefore ask the Minister, whether the Patent Office showed Graddy and Szymanski the auction-house reply that I have just cited on why the process was not as straightforward as DACS imagined.
	This is not the moment or the hour to get into arithmetical calculations, but there seems general agreement that fewer than 1 per cent of British artists will qualify for droit de suite in the auction houses and among dealers if the threshold is lowered in the way that the draft statutory instrument intends. I shall say that again slowly. Fewer than 1 per cent of living British artists altogether will benefit. That percentage makes DACS's raising of hopes to those described as poor artists a cruel mockery, especially when Szymanski and Graddy calculate that, with the €1,000 threshold, artists below €3,000 would receive an average payment of £49 before DACS's 25 per cent fee. In Leeuwenburgh's study of the 189 living British artists above the €3,000 threshold, eight of them would share 31 per cent of the total droit de suite—yet Caro, Hockney and Hodgkin, obviously among the potential beneficiaries, have all come out against the principle of droit de suite in their letter to the Times. The £49 that I cite as being the average payment between €1,000 and €3,000 does not, of course, include the costs to business.
	Beyond the extra costs to business, what are the consequences of this U-turn? Despite the Government's earlier inter-departmental unanimity in opposing the directive, I am sure that the Minister must have Whitehall cover, just as he has conferred it on his officials. But the Government's boast of not gold-plating EU directives is now holed below the waterline, despite the published Cabinet Office guidelines for civil servants in preparing regulations of several years ago, and the Chancellor of the Exchequer's very recent reiteration of gold-plating no longer occurring. For small businesses—whether auctioneers or dealers—a new set of systems will need to be set up, potentially to cover 50 countries. Making the agent and vendor jointly responsible creates double the hassle.
	Much more serious still when considered in the context of the market moving offshore is the sense of irresolution now conferred on the Government's future defence of the derogation relating to dead artists, who will constitute 80 per cent of the droit de suite universe. Our recent allies Austria and the Netherlands have already legislated at €3,000. How does our behaviour affect their confidence in us when we shall need their help again, or how does it discourage the Commission or the European Parliament from assailing anything else that smacks of concession to us? A Government who stood firm in their first term of office have run for illusory cover in their third.
	The trouble with throwing away a key concession at the lower end—I am sure that the Minister does not consciously believe that he is damaging the market at that level—is that it makes it much more difficult to hold the line at the top end, where the capacity for damage is in due course immense. Those at the lower end on whom the Minister has unnecessarily increased the burdens will not even be comforted that the market will overall in future be more secure. I beg to move.
	Moved, as an amendment to the above Motion, at end to insert "but this House regrets that the regulations go beyond the requirements of the European Union directive implementing the regime for the payment of artists and calls for the regulations to be replaced within six months by regulations in accordance with the directive".—(Lord Brooke of Sutton Mandeville.)

Lord Jopling: My Lords, I am not sure what interests I should declare. My wife and I are occasional purchasers of works of art. I have a son who is an art dealer and a daughter-in-law who is a well-known artist.
	I was astonished to listen to the opening speech by the Minister. I am even more astonished having heard the background to this case, which my noble friend Lord Brooke set out in his remarkable speech for someone who usually speaks in this House with such moderation. I have rarely heard him speak with a stronger sense of irritation than I detected this time. Even before my noble friend's speech, the Minister's speech seemed grossly complacent. I can only say that his speech was economical with the facts. Who would have thought that the Government opposed these proposals tooth and nail as they went through, threatened the Luxembourg compromise and voted against the measure? I hope that the Minister will be more frank with the facts when he winds up than he was when he opened.
	One of my principal objections to this measure arises because I have been a member of the Merits of Statutory Instruments Select Committee since it started. I spent two hours at its meeting this afternoon. The committee is strongly opposed to gold-plating, and it was largely because of that that it drew the attention of your Lordships' House to this measure.
	Contrary to what many noble Lords feel, I have a good deal of sympathy for giving artists a right to a share when their work significantly increases in value over the years. But I do not see the logic in reducing the threshold from €3,000 to €1,000. By my calculations, an artist whose work sells for €1,000 in a secondary or later sale after the primary sale will receive, after the 25 per cent administration costs, only slightly over £20. I wonder whether that is worth all of this—reducing the threshold—when at the bottom end of the sale an artist will receive that trivial amount.
	I was astonished to hear the Minister saying, as I understood him, that the cost of administration of all of this need not be more than £1 per sale. Well, one has only to think of administration costs. What can one do for £1 in terms of staff, accommodation and materials? If that is what the Minister has been led by his civil servants to tell the House, it beggars belief. It is nonsense that administration of this sort of sale could be done for as little as £1.
	I understand that most subsequent sales of works of art achieve significantly less than the first sale by the artist. As I understand it, in the majority of cases where a collector supports young artists and he purchases a work of art, the overwhelming chance in subsequent sales is that they will be at a lower price than the first sale. Someone who likes to support young artists will know that if he wants to sell a piece of work later he is likely to take a loss that may be made even bigger, because he has to pay the charge on that as well. We must realise that the implications of this measure will be to deter at the margin collectors who wish to support young artists.
	I cannot help but believe that this measure is a formula for driving the art market away from this country to Switzerland, Japan or the United States. All I can plead is that the Minister will think again, take this measure away and bring it back in another form.

Lord Monson: My Lords, this is a perfectly dreadful set of regulations and I very much welcome the attempt by the noble Lord, Lord Brooke, to make them slightly less bad. I have absolutely no interests to declare, although my late father-in-law was quite a well-known artist; had he not died tragically young, I somehow doubt that he would have had much to say in favour of these regulations.
	It is ironic that the regulations purport to deal with intellectual property, when there is no intellectual, or indeed moral, case for them at all. For a start, they benefit only random forms of artistic creativity, including, for example, collages, prints, lithographs, tapestries, photographs and ceramics hand-painted in factories, as in Stoke-on-Trent, even though in many of these categories the items are rarely signed and are therefore often untraceable. Excluded are, for example, books, including those expensively bound in hand-tooled leather; hand-crafted furniture, which can fetch thousands of pounds; expensive hand-woven knitwear incorporating original designs and expensive threads, which can cost hundreds of pounds; stained glass; musical instruments, so I believe; and, indeed, buildings—many architects consider their buildings to be works of art, notwithstanding that some people may regard some office blocks in the City of London to be the architectural equivalent of Damien Hirst rather than of Rembrandt. Illuminated manuscripts and fine replicas of 18th-century long-case clocks are grey areas. Perhaps the Minister might be able to clarify the state of affairs here.
	Whether the artist gets the money to which the EU claims he is morally entitled depends entirely on how the object that he has created changes hands. If it is sold privately—or, for example, on eBay—he gets nothing whatever. The expenses of collection and of keeping tabs on every photograph or ceramic object—neither of which, as I said, is normally signed—just in case it might in the future shoot up in value to around £700 will be horrendous. All this is made worse by the Government's last-minute decision to lower the threshold from €3,000 to €1,000, approximately £680. The rake-off of something selling for this price is a princely £27.20 gross. How much of this will reach the artist after the expenses of collection? We are told—and the noble Lord, Lord Brooke, has confirmed—that the latter will average 25 per cent, but the percentage will surely be higher on lower-priced items. A fee of £6.80 could hardly cover the costs here. Like the noble Lord, Lord Jopling, I find the £1 cost of collection cited by the Minister frankly unbelievable.
	In France, as the Times yesterday pointed out, the people who will really benefit from laws like this are the heirs of famous artists such as Picasso, not the small, struggling, unfashionable artist. I hope that the Government will stick to their guns where deceased artists are concerned.
	The matter demonstrates how crazy the Government are to agree to further and further extensions of QMV, thereby allowing the EU to intrude still further into the nooks and crannies of our everyday lives, in the immortal words of the noble Lord, Lord Hurd. Luckily, an Irish artist, Mr. Dominic Penny, who lives in Dublin, is appealing to the European Court, claiming that the legislation is a clear infringement of his human rights. He is outraged at what he calls,
	"Brussels' interference in his copyright, his rights to form a contract and his rights to say who should or should not benefit from his estate".
	Let us wish him every success in his legal challenge. Meanwhile, let us support the amendment of the noble Lord, Lord Brooke, which, if carried, will at least pave the way for the legislation to be improved to some extent.

Lord Bernstein of Craigweil: My Lords, I have the greatest respect for my noble friend the Minister, so I regret supporting this amendment but I feel that I should do so. First, I declare an interest. I am a director of, and a shareholder in, Waddington Galleries, which deals in modern and contemporary art. Because of this interest, anything that I may say in objection to artists' resale rights will no doubt be met by the legendary Mandy Rice-Davies retort, "Well, he would say that, wouldn't he?".
	However, I would like to raise the issue of the minimum level at which the resale levy is payable—a point also referred to by previous speakers, who noted that the regulation established it at only €1,000, despite the European Union having set the level at €3,000. I can raise this issue with a clear conscience because Waddington Galleries' sales are of a far higher value and this part of the directive would not affect the gallery.
	As the noble Lord, Lord Brooke, said, discussions within Europe about artists' resale rights have been going on for a number of years, and the British Government, and in particular the Prime Minister, have been stalwart in opposing some of the measures which would adversely affect the British art market. In the case of the threshold, the Government argued in favour of €10,000. In the Internal Market Council agreement, a figure of €4,000 was decided on but was later reduced to €3,000 as a result of conciliation between the European Parliament and the Council. As the noble Lord, Lord Brooke, has already mentioned, as a result, the Government voted against this directive.
	It seems extraordinary that the Government, having opposed this part of the directive so strongly, have made it even more restrictive than the figure they had previously challenged. At this point, I should say that I do not really understand the figures quoted by the Minister about the costs of administering the scheme. According to the DTI impact assessment, the cost is considerably higher. As I understand it, at a threshold of €3,000, the artist would receive slightly more than the costs involved in collecting the money. At a threshold of €1,000, the artist would only receive the princely sum of between £18 and £20, and the total cost of collection would be approximately £40. Does that make any sense? The Dutch and Austrian Governments, who supported the UK in opposing the directive, clearly do not think so as they have already legislated to exclude sales below €3,000.
	Nor did the Minister think that it made sense when he said to the House of Commons Culture, Media and Sport Committee last year that reducing the threshold below €3,000 would mean that,
	"the administrative costs become an absurdly high proportion of the actual payments which will go to artists".
	What, I wonder, has made him change his mind? No doubt he is trying to help the lower-paid artists, but the amount that the artist would receive is derisory. It is interesting that in a letter to the Times artists of the stature of David Hockney, Michael Craig-Martin and Howard Hodgkin argued against the low threshold of €1,000. They said:
	"It will undoubtedly envelop the market . . . in red tape and it will discourage art dealers from buying particularly the work of emerging artists".
	My friends in business often complain to me about government bureaucracy and red tape and I normally give a robust defence but, in this case, I would find it impossible to do so. So, perhaps, would the Chancellor of the Exchequer, who said in a recent speech to the CBI,
	"for some time I have been concerned about what is called the goldplating of European regulation where in the process of translation into our own UK laws we end up with additional and unnecessary burdens".
	As I said, I have the greatest respect for the Minister and I will listen to his reply with interest. I hope that he will revert to his earlier view that a threshold below €3,000 would not make sense.

Lord Dubs: My Lords—

Lord Luke: My Lords—

Lord McKenzie of Luton: My Lords, this is not a time-limited debate. I suggest that we hear from the noble Lord, Lord Dubs. There have been two speakers from the Conservative Benches so far.

Lord Dubs: My Lords, I shall be brief and, in contrast to other speakers, support the Government.
	The information that surprised and shocked me most was that 40 per cent of British artists earn less than £5,000 per annum. If we want flourishing art in our country, where we have, and encourage, creativity, we must look at the well-being of young artists. If this measure helps young artists, it is surely justified. After all, most artists have to sell their works of art cheaply at the start of their careers, before they have made any reputation for themselves. This measure is intended directly to help those artists start their careers and get a little bit more for the work that they have created.
	I appreciate the issue of the threshold, about which the noble Lord, Lord Brooke of Sutton Mandeville, argued very strongly. On the other hand, some EU countries have set a much lower threshold. It is right that the Government seek to achieve a balance between the threshold and keeping bureaucracy to a minimum. It has been said that this will damage the British art market altogether. I am not convinced of that argument. If someone were to send a picture abroad to be sold—say, in New York—and then it were to be returned, there would be transport, handling and insurance costs, the gamble on the strength of the pound against the dollar, comparable rates of sales premiums—or they might not be comparable—and import VAT.
	Import VAT is surely a significant factor in the equation: a tax on imports into the EU from non-EU countries, which is now 5 per cent across the EU. There is no import VAT for movements within the EU. It would therefore cost an EU buyer significantly more in import VAT to buy in New York than it would cost to pay resale royalties in London. If the buyer is a European national, they would be required to pay the 5 per cent import VAT on the value of the painting, or other work of art, to return it to the EU.
	If the painting is valued at £1.4 million, for example, import VAT would be £70,000, compared with the maximum royalty payable of £8,500. The argument that works of art will be diverted from this country simply does not stand up in the face of those figures. Of course, there is a sliding scale. At a threshold of €1,000, an estimated 50 per cent of eligible artists will benefit.
	I do not always agree with the Government, but I believe that they have got it right in this instance. They are bringing forward the measure in such a way that it will help many British artists.

Lord Luke: My Lords, I congratulate my noble friend Lord Brooke of Sutton Mandeville on securing this debate on an issue of such crucial importance to the art market. I join with my noble friend Lord Jopling in remarking on the brilliance of his speech.
	This droit de suite directive has been described to me as the darkest cloud on the horizon for the international competitiveness of our art market—a statement with which I strongly concur. As a dealer in watercolours myself—I state that interest—I am also a lover of art and a Conservative. I have opposed this paradoxical directive from the very start. I strongly believe that it will be highly detrimental to the British art market, and will seriously damage that part of it which depends on imported goods.
	The 5 per cent import VAT mentioned by the noble Lord, Lord Dubs, has already considerably damaged the British art market, in driving the very top of the market to, principally, New York, whereas we used to have almost a monopoly.
	I welcomed the general cross-party opposition to the original directive, and was somewhat surprised by the Select Committee's response to the issue. It was upsetting that Her Majesty's Government finally had to adopt the directive on 27 September 2001. However, it is more upsetting, now that we appear to have no option but to implement the directive, that this draft statutory instrument gold-plates the directive, rather than supporting most of the significant concessions secured by the Government during negotiations. As the Merits of Statutory Instruments Committee has highlighted twice in its report:
	"the Regulations go beyond the minimum required by the Directive in two respects. These are: the minimum price threshold for a sale to be liable to resale royalty, which the Regulations set at 1,000 rather than 3,000 euros; and the provision made in the Regulations for joint liability of the seller and an art-market professional involved in the sale".
	We have heard about that already.
	The British Art Market Federation argued that considering the force of the British opposition, this gold-plating is particularly inappropriate and unnecessary and that it is inconsistent with stated government policy on EU directives. I look to the Minister to give firm assurances today that this will be altered. I suggest that the current draft SI is taken away and a new draft SI produced and published in its place.
	As the House of Commons Select Committee pointed out in its report The Market for Art:
	"The state of the visual arts is a useful proxy for the health of our cultural life".
	Britain currently leads Europe in the provision of services for the buying and selling of art. Our country has more than 50 per cent of the European art and antiques market and 25.3 per cent of the global market. It is a market made up of around 10,000 businesses that provides employment for more than 37,000 people. The UK art market is particularly dependent on cross-border trade. In this key respect, it is the only serious global competitor of the United States. This directive, and the subsequent SI that we are considering today, will materially reduce our competitiveness, encouraging the displacement of the market to the United States and Switzerland which, not surprisingly, have expressed no intention of following suit when the levy comes into force in Britain. This will cost our market millions in revenue and a significant number of jobs.
	Research in countries that are already enforcing the droit de suite has shown that the benefit to artists has been virtually insignificant, as did the Patent Office's initial compliance cost assessment in 1996, Market Tracking International's report in 1999 and the Patent Office study in 2003.
	Will the Minister explain clearly to the House why the threshold below which the droit de suite royalty is not payable has not been set at €3,000? I believe that there is an error in the evidence that the Design and Artists Copyright Society gave to the Select Committee. On the one hand, Her Majesty's Government say that they want to help struggling artists, but on the other, they put forward an SI that will work against them. That is a paradox I cannot condone or, indeed, understand.
	The most significant concession gained by Her Majesty's Government in the negotiations was the permitted derogation by which the introduction of the directive for those entitled to royalty for up to 70 years after the artist's death can be delayed until at least 1 January 2010. Why have Her Majesty's Government not taken advantage of that provision and extended the date of derogation until 2012? That could have been one occasion where gold-plating would have been worth while.
	Finally, why have Government continued to go down the gold-plating path, particularly as there are very few examples in UK copyright law of such a system? Indeed, the Merits of Statutory Instruments Committee suggested that it may have been more appropriate to adhere to the minimum requirements on these points in the initial implementation of the directive.
	I find myself in the unusual position of supporting the issues that the Government fought for, but not the recommendations of the Select Committee or the SI as we see it in front of us today. I hope that the Minister will not disappoint me and will provide assurances that the gold-plating of this proposed regulation will be removed and that Her Majesty's Government will now implement all the concessions they gained in negotiations. That is the only way we can make sure that our art market remains one of the strongest in the world.

Lord Willoughby de Broke: My Lords, when the Minister started his speech and talked about concessions, I thought he was going to come clean with the House and explain the massive concessions he has made in agreeing to this regulation and this directive. But the truth is that this is yet another massive cave-in to the European Union at the expense of Britain's true interests.
	What is so depressing about the whole saga, which, as my noble friend Lord Brooke says, has been dragging on for up to 10 years, is that this Government earlier recognised the damage that the directive could cause to the London art market and fought London's corner very hard indeed. The Government then recognised the importance of the art market to London. London has, I believe, 24 per cent of the world's art auction market—far more than the rest of the European Union put together, and 40 per cent of the total British art market is imported specifically for sale here in Britain. But this whole sorry saga shows that the much-vaunted strong voice in Europe is nothing more than what the Times yesterday called in its leader the "bleat and retreat".
	The Government were always against the directive. I understand that the Prime Minister personally got involved in trying to stop it being put into law, and, at one point, threatened to use the veto. But, in the wonderful world of the EU social model, one country's competitive advantage is another country's competitive disadvantage and must be, therefore, harmonised—that is to say, eliminated—and hang the economic and social consequences.
	This directive was subject to the qualified majority voting procedure, as outlined by my noble friend Lord Brooke. To stop it the Government needed to find enough allies, which they did, but unfortunately that blocking minority alliance failed to hold, and here we are this evening passing the regulation into law. What price our much-vaunted seat at the top table? It is more like a high chair in the corner, of absolutely no consequence.
	The Times leader that I mentioned earlier ended by saying that Parliament,
	"which tends to let EU-based regulations slip through, must act to protect Britain's status as a global centre for artists and art".
	I have news for the Times: Parliament cannot change so much as a comma or syllable of these regulations. To do so would be contrary to EU law, which is supreme—so much for our parliamentary sovereignty and democracy.
	The final pathetic note in this sorry story was struck by members of the London Assembly the other day when they proposed that their mayor, Ken Livingstone, should try to persuade New York and Zurich art markets to introduce the droit de suite there. I imagine that that was just before they went down to the garden to talk to the fairies about what they wanted for breakfast.
	This again demonstrates with complete clarity that when it comes to European legislation neither this place nor the other place has any role to play whatever. We have no power, the powers lie in Brussels; and shame on us for agreeing to that.
	If my noble friend Lord Brooke decides to vote tonight on this amendment, I will be the first to vote in his Lobby.

Lord Inglewood: My Lords, I should declare an interest: my wife is a professional photographer who sells prints from time to time. I live in hope that she may exceed the threshold in the value of her works. I am also chairman of the Reviewing Committee on the Export of Works of Art and could conceivably be affected in that capacity by the possible export of works by living artists, although the 50-year rule makes it unlikely.
	In 2000–01, when this matter was under consideration in the European Parliament, I was the legal affairs spokesman for the Conservative Party and the matter was considered principally in the Parliament's Legal Affairs Committee. I was also, as it happened, an alternate member on the Conciliation Committee, but because of the outbreak of foot and mouth I was unable to attend the meeting.
	At that time I was convinced by the Government's arguments that the proposal for the droit de suite was not in the best interests of Britain, Britain's art market or its artists. As such, with considerable difficulty, I persuaded my Conservative colleagues that we should stand shoulder to shoulder with the Government on this issue. I do not apologise for doing that. I believe we did the right thing, and in similar circumstances I would like to think that I would do the same again.
	However, having seen how the Government have changed their ground subsequently, although it no longer affects me directly, I am disheartened. It is not an encouragement, in a forum where there is no government and where national interests come together from time to time, to the Opposition parties in this country to stand with the Government of this country to fight for Britain's interest if we subsequently find that the picture at home is so unilaterally dramatically changed.
	Although we lost the votes in the European Parliament, had the British Conservative Party not been part of the Group of the European People's Party and European Democrats, we would not have been able to secure the number of the votes that we did. They not only felt sympathetic towards us; they then actually voted for us. Some in my party want to take the British Conservative MEPs out of that group. If that happens, what I have just alluded to will no longer happen and British interests will, in my judgment, suffer.
	Three things puzzle me about the legislation. One of them has puzzled me throughout. In the Commission's consideration of whether to introduce the droit de suite, the effect on the London art market of the possible emigration of sales outside the Community was of de minimis importance. How was it necessary to introduce the legislation in the first place in the interests of creating a single market? A fundamental intellectual schism runs through the argument for the legislation. If I am right about that, the basic legislation has been put on the statute book in breach of the doctrine of proportionality.
	My second question concerns the negotiation to try to extend the scope of the Berne convention. A moment ago, I mentioned the support that we receive from our colleagues in the EPP-ED group. A considerable amount of that support came from the chairman of the Legal Affairs Committee, Ana Palacio, subsequently Foreign Minister of Spain, who was anxious to take the matter forward in the context of negotiations on the Berne convention, so that we would end up with a droit de suite across the globe. Whatever else had happened, that would have created a level playing field for the London art market. That seems a reasonable way in which to take the matter forward if the Government remain wedded to their present position.
	Finally, what is the relationship between the European legislation and Article 295 of the treaty? Article 295 is straightforward. It states:
	"This Treaty shall in no way prejudice the rules in Member States governing the system of property ownership".
	In his opening remarks, the Minister referred to the law of copyright and was quite rightly picked up by my noble friend Lord Brooke. The law of copyright was referred to as the measure for the creation of the completely new, novel law of property being introduced into this country by the legislation. Some countries have droit de suite; others do not. In this country, droit de suite has hitherto been a form of legal property unknown to our courts. However, under the legislation, the directive creates the right of droit de suite in this country. It is expressly stated in the treaty, in Article 295, that the treaty shall in no way prejudice the rules in member states governing the system of property ownership. Surely, what we now have under the legislation is in breach of the terms of the treaty.

Earl Howe: My Lords, I intervene briefly in this debate. In doing so, I declare an interest as chairman of LAPADA, the largest UK trade association for fine art and antiques dealers. I endorse in every particular what my noble friend Lord Brooke said and also what I might call the macro-political considerations so powerfully set out just now by my noble friend Lord Inglewood. It is not my intention to repeat the arguments that they have so ably articulated; but perhaps I may single out a few points of emphasis.
	As has been said, the art market as a whole was extremely encouraged by the stance taken by Her Majesty's Government and the personal commitment of the Prime Minister, when the directive on artist's resale right was being debated in Europe. Throughout the negotiations, the Government took the line that if there had to be a directive of this nature, it should be issued in a form which did the least possible damage to the competitiveness of the UK art market. It is perhaps worth reminding ourselves that it has not always been in London's favour. London became the pre-eminent centre of the European market only in the 1970s, following the imposition of a tax on the art trade in France in the 1960s and the imposition of droit de suite in Germany in the 1980s.
	As we have heard this evening, the concern of many is that droit de suite when rolled out across the EU as a whole will make a key part of the European art market instantly uncompetitive in comparison to dealers and auction houses operating, for example, in New York, and that as a direct result we shall see London diminishing in importance as a global centre of fine art trading. The impact of the directive will be felt not just in relation to high value works of 20th century art. The knock-on effect will hit many other sectors of the market as well. Where you have a high value collection that is to be consigned for sale, it will typically be consigned as a whole to wherever in the world is most advantageous for the seller. Furniture, jewellery and old masters will all be caught up in that. So the Government were entirely right to try to minimise the impact of the directive on the UK.
	One of the Government's key negotiating objectives during that process was, as we have heard, to try to maximise the threshold below which droit de suite would not apply. They argued that the threshold should be no lower than €10,000. They voted against the directive when the threshold had been reduced to €3,000. So it was unsurprising when the consultation document was issued by the Patent Office last year to see a proposed threshold for the levy of the highest possible amount allowed for in the directive—€3,000. It seemed inconceivable then, and it therefore almost defies belief now, that, having taken that stance and having listened to all the representations on this issue from the UK art trade, the Government should now have performed this U-turn and have created a levy threshold at a mere €1,000, which is lower than in the Netherlands, lower than in Austria and lower even than in Germany.
	It is very hard to see what benefit the Government believe will come out of this. As the Minister said, the idea is that poorer artists should receive some financial reward on the sale of their work. But on a sale at €1,000, we are talking about very small sums of money. At that sort of level, the net royalty is dwarfed by the administrative costs of delivering it—not only the costs incurred by the collecting agency, but also those of the dealer or auction house.
	I do not know what evidence has persuaded the Government that extending the scope of the levy to sales below €3,000 would benefit predominantly poorer artists. That is the argument that they have advanced, even though I have not seen any evidence produced to support it. The recent survey by Graddy and Szymanski, mentioned by my noble friend, found that for sales between €1,000 and €3,000 the value of droit de suite is, in their words, negligible.
	It should not be forgotten that at the lower value end of the market, we are typically looking at resales of art not by major auction houses, but by dealers, many of them small businesses. The administrative burden of coping with the levy will therefore fall disproportionately on such businesses. What will that administrative burden be? First, it is to identify those works that they are selling to which the levy will apply; to build the levy correctly into the sales invoice; to submit a return to the collecting agency; to check back the agency's calculations; to pay over the levy; and to keep appropriate book-keeping records. They will also need to amend their contracts of sale. The estimated administrative cost of all that is supposed to be £1. I fail to see how that figure is borne out, and I put it to the Minister that the estimate provided by BAMF is much higher. Further, the figures he spoke of have been comprehensively criticised by BAMF, even though so far as I can see that critique has not even received a comment from the Patent Office.
	Not only have the Government gone further than they need have done in implementing the directive, they have placed unnecessary burdens on small business owners for no commensurate benefit to artists. That cannot be in the national interest, and in the light of everything the Government have said and done hitherto, I believe that the art market has every right to feel badly let down.
	We can only press the Government to revise their decision. I believe that the minimum which should be done by the Minister's department is to follow the proposals put forward by Graddy and Szymanski in their report. Those are to monitor the changes during the next few years, not only in the UK art market but also in art markets elsewhere in the EU and other markets outside; to monitor the trends in the number of works imported into the UK from non-EU countries; and to ask dealers and auctioneers to tell them what effect they believe droit de suite is having on their businesses. If, as seems inevitable, the Minister is unable to accede to the terms of my noble friend's Motion, I hope that at the very least he will feel able to give us those assurances.

Lord Freyberg: My Lords, first I declare an interest as an artist who at some stage could benefit from the new measure. When I last spoke on this issue, on 10 December 1997, I was opposed to the whole idea of artists' resale rights because I felt that there was a different principle involved with the sale of art and that of other creative mediums such as writing and music. I was concerned too about the increased bureaucracy that introducing resale rights would involve, and the fact that only the most successful artists stood to benefit. We have heard particular mention of a small number of deceased artists such as Matisse and Picasso, as has happened in countries such as France which already has resale rights. In addition I was anxious that the levy might have a potentially detrimental effect on the UK's position as the art market capital of Europe.
	While my reservations about many of these issues still stand, the analysis undertaken by the DTI and others has persuaded me that the effect on the art market will not be as severe as has been widely announced by its representatives. I further believe that the ruling could actually benefit more artists than initially appeared to be the case. The reason is the Government's adoption of the lower, €1,000 threshold for liability to resale rights rather than the €3,000 minimum laid down by the European Parliament. The Government have done the right thing in opting for the lower price threshold in order to allow as many artists as possible to benefit from the resale rights, and not just better-off and often deceased ones.
	Much has been made by those representing the art trade of the increased bureaucracy that will flow from going beyond the EU's minimum threshold. While I share their concern about the added burden for art dealers and auction houses, and worry that dealers could be tempted to overstate the costs in order to offset them, it seems nevertheless unreasonable that artists who are more in need of extra income should be left out. To have complied with the €3,000 minimum would not have made greater sense than what we have now. The lower threshold significantly increases the number of artists who benefit from the resale right and broadens the scope to include more photographers, illustrators, crafts people and so forth. Surely that was the best argument for the directive in the first place, although I cannot pretend that the remuneration for the majority who qualify is anything but small.
	The British Art Market Federation has understandably argued that with works of art selling for between €1,000 and €3,000 the cost of administering the resale right is so disproportionately hefty it outweighs the benefit to the artist. However, it cannot be stated strongly enough that the majority of artists make very little money from their work, even those who are comparatively well known: for those on an income below the minimum wage—which is often the case—even the small sums that come from resale rights are welcome.
	Another point worth making, and to me one of the strongest cases for resale rights, is the fact that artists frequently produce their best work when young and selling for low prices. However, they derive no benefit when this period of their work becomes sought after and is resold for ever higher sums. The new regulations will at least do something to address this problem.
	Another important and little publicised benefit is that artists are now allowed to find out exactly how much their works have resold for—something that has often been a bone of contention—and to have recourse to the courts if this information is withheld. This will create greater transparency and greater trust between artist and dealer.
	While it is difficult at this stage to calculate the number of works of art that will be eligible for the resale rights, it is interesting to note that in 2003–04, only 1,758 relevant sales on the Arts Sale Index would have been for living artists, with another 7,696 for deceased artists. The Arts Sale Index is made up of sales of art in the UK auction houses and is generally estimated to account for half the sales, with those by dealers making up the other half. This would have involved £1.8 million of royalties payable to living artists—£1.1 million to British ones. If the right were applied to heirs of deceased artists as well—which is due to happen in the UK in 2010—then £11.4 million of royalties would be due. One strength of the way the royalty system has been set up is that the seller and the agent—dealer or auction house—of a resold work of art costing more than €1,000 are jointly responsible for ensuring that the resale rights are paid.
	On a negative note—and here I entirely agree with the noble Lord, Lord Brooke—the Government have been shamefully slow in arriving at the package that is being set before us this evening, in spite of being fully aware of it since September 2001. I have enormous sympathy with the art dealers who are expected to cope with numerous unresolved issues such as how everything will work in practice, and vague definitions they now have no chance to question, while artists have high expectations of quick payment.
	Finally, as someone who makes video work, I draw attention to a deficiency in the definition of a work of art under the regulation, which refers only to "graphic or plastic art", omitting the increasingly popular area of computer-based pieces such as video, installation, sound and web-based art. This means that the predominantly video-based works of well-known artists such as Gillian Wearing, Douglas Gordon and Jane and Louise Wilson is not technically covered by the new regulation. I am sure that is not intentional, so I ask the Minister to review and remedy that at the earliest possible stage. Speaking to DACS—the Designer and Artists Copyright Society—I understand that the wording of a work of art is likely to have originated from the definition in Part 1, Chapter 1, No. 4, of the Copyright, Designs and Patents Act 1988, which mentions the category of film, but not as a work of art, and which similarly needs to be updated.
	With all my reservations, I wish these regulations success, and really hope that a number of struggling artists get real benefit from them. Therefore, I am unable to support the amendment proposed by the noble Lord, Lord Brooke.

Lord Marlesford: My Lords, I support the extremely persuasive speech of my noble friend Lord Brooke. Unlike a number of noble Lords who have spoken tonight, I have no interest to declare and I certainly have no expertise in the art market. I speak in this debate because I am deeply shocked that this Government, who have made so much of deregulation or better regulation and lifting from the citizens of this country the burden imposed by the sort of regulations of which this is an appalling example, should be producing it tonight. It makes the position very difficult.
	We have heard an awful lot over the past eight or nine years about joined-up government. I cannot believe that the unit in the Cabinet Office which is responsible for lifting the burden of unnecessary regulation is enthusiastically supporting the noble Lord, Lord Sainsbury, today. Still less can I believe that its members have helped him to write his speech. The people who have helped him to write his speech obviously know very little about business. What makes it so appalling is that the noble Lord, Lord Sainsbury, was once himself a distinguished—perhaps even successful—businessman. The fact that he was able to make the speech that he did, producing the absurd arguments about the administrative costs, is a terrible example of the way in which Ministers are inclined to come to the House and parrot what their civil servants give them. I really expected better of the noble Lord, Lord Sainsbury. If he had spent two minutes thinking from his own business point of view, I do not believe that he would have produced any of the figures he has given for enforcement, which have been so devastatingly exposed by a number of my noble friends.
	I have read very carefully the statutory instrument and the very useful Explanatory Memorandum on the Artist's Resale Right Regulations. I was alerted to the subject some weeks ago by a letter in the Times from the British Art Market Federation, by which I was appalled. In fact, as the Minister may remember, in the economic debate I cited the three worst examples of where the Government have gone back to over-regulation. As I read the guidance in the Explanatory Memorandum I found more and more examples of how ill-conceived this all is.
	Let me deal with the argument put forward by the noble Lords, Lord Freyberg and Lord Dubs, about the need to help struggling artists and so on. We can all be in favour of that. But surely—and it is another example of a lack of joined-up government—the Government are in the business of trying to make help for needy people more efficient. To invent or adopt or accept a system such as this as a means of helping people is wildly cost ineffective.
	It also suggests to me that there is great scope for evasion, avoidance and, indeed, skulduggery. Obviously there is a great deal in the regulations about there not being an incentive for people to cheat but, of course, it is very unclear who the dealers actually are. As €1,000 is a very low figure, there will be more activity—particularly at the lower end—and far more payment in cash. That is not particularly desirable, but it will happen because that is how human beings work. People will set up to act as representatives or agents to avoid paying.
	In Schedule 2 to the draft statutory instrument there is a fascinating list of countries outside the EEA whose citizens will benefit from this. I doubt that I am the only Member of your Lordships' House to receive spam e-mails—I suspect the great majority of Members receive them—which manage to get through the brilliant House of Lords computer system. These spam e-mails—mainly from African countries—offer us generous shares in millions of pounds if we would like to give them certain financial details. I usually delete them at once but, if I have a moment or two to spare, I sometimes read them. If they are well written I will usually reply, "Pull the other one". That usually ends the problem. Occasionally I get a reply from someone who says that he does not understand what I mean, in which case I then reply, "Then pull them both". That is the way I deal with that particular problem.
	I am quite sure that there are people with great enterprise in some of these countries who will, on reading the statutory instrument, represent themselves as artists—maybe dead or not dead, but lesser known. They will get their names and they will apply to this bureaucratic body which is being set up for their share of the lolly. This will have a most deplorable effect and not just on the art market, on which I am not an expert. Before the Government legislate they have to work out the practical consequences and methods of enforcement. They have clearly failed to do so. What is so sad is that, as we have heard from a number of noble Lords, the Government used to be opposed to this nonsense. That makes bringing it in now all the more deplorable.

Lord Clement-Jones: My Lords, I thank the Minister for his introduction of the regulations and the noble Lord, Lord Brooke, for giving us the opportunity to debate these regulations so vigorously.
	I and my honourable friends in another place have considered very carefully the various reports, including that of a Select Committee of the other place, the Merits of Statutory Instruments Committee and, most recently, the report of the London Assembly Economic Development, Culture, Sport and Tourism Committee. We have held meetings with representatives of the British Art Market Federation and DACS.
	Despite the vigorous arguments put forward by BAMF, we have come to the conclusion that the Government's approach is correct and that the €1,000 threshold set out in the regulations is right, as is the decision to require collection by collection societies. That is the conclusion that the Culture, Media and Sport Committee came to last year, and we have reached it because of very similar motives.
	We on these Benches are not great fans of the resale right; we believe that it is an extremely blunt instrument, for many of the reasons put forward today. The original reservations of the noble Lord, Lord Freyberg, were entirely correct. However, on the basis that it is a fait accompli in EU terms, it is important that it benefits young, newly emerging artists and not simply established or better known ones—or, indeed, their heirs.
	At the €1,000 level, it is estimated that some 50 per cent of living artists will benefit. This is where I am at variance with the figures put forward by the noble Lord, Lord Brooke.

Lord Brooke of Sutton Mandeville: My Lords, the Arts Council thinks that there are 96,000 artists. In a submission to parliamentarians, DACS suggested that there might be 130,000. We are talking about a figure of less than 1,000. How does the Liberal Democrat Party make that 50 per cent?

Lord Clement-Jones: My Lords, that is the evidence that has been put forward by a number of bodies, and it is what we rely on.
	That, surely, must be the right way forward. It is clear that the Government have changed their mind in terms of where the threshold should lie, but we believe that they are right to do so.
	The countervailing argument put forward by BAMF is strongly supported by the report from the London Assembly's Economic Development, Culture, Sport and Tourism committee—that the imposition of a lower threshold will greatly damage the competitiveness of the London art market. That report faithfully reflects concerns about trade going to New York and Zurich but it does not give any conclusive evidence of this. In any event, such evidence as there is affects the higher priced works of art, not those at the €1,000 to €3,000 level. I accept that at the top level, that may be the case in future, but there is no flexibility in applying resale right at that higher level. It is true that, as the London Assembly report points out, multiple costs add up, but I do not believe that this is a reason to penalise less well known artists.
	Let us also not forget that there will be a maximum of €12,500 of royalty payments, the exclusion of works sold on within three years for less than €10,000 and the exclusion of works of deceased artists until 2010. I welcome the Minister's statement about the application for permanent derogation. I strongly agree with the London Assembly committee report on the question of monitoring. I want the Patent Office to publish details of how it intends to measure the impact of the droit de suite on the UK art market. In particular, the committee wanted to assess the impact on the sale of contemporary works, the diversion of the market from London and a full cost/benefit analysis of the application of the minimum price at which the directive applies. Those are all sensible suggestions and I hope that the Minister will reply positively.
	As regards the collecting society aspect, although DACS is well known in this field, I do not believe that there should be a monopoly. If another body or commercial organisation wishes to perform this role it should be able to do so.
	I do not know what weight to attach to the Merits Committee report, but it does not clearly state that the regulations are an inappropriate way of implementing an EU directive. The committee's reasoning does not lead to that conclusion.
	Finally, I am in good company. The noble Lord, Lord Beaumont, who represents the Green Party in this House and has a much better collection of works by young artists than I do, has asked me to indicate that he also agrees with the Government's approach.

Viscount Astor: My Lords, the question that the Minister failed to address when he introduced this order was why the Government have changed their mind. Indeed, he did not really say that they had changed their mind: he skipped over that point. It was demonstrated by the speech of my noble friend Lord Brooke, who said almost everything that can be said in this debate and destroyed the Government's case. Why did the Government change their mind? There is no requirement under the directive to charge a retail levy on sales below €3,000, so by taking this voluntary decision to do so, the Government will have added considerable costs and complication which will affect smaller businesses.
	As we have heard from many of those who spoke this evening, this is directly against the advice of the Chancellor of the Exchequer, Gordon Brown, who says that he is concerned about,
	"the goldplating of European regulation where in the process of translation into our own UK laws we end up with additional and unnecessary burdens".
	What is more, he went on to say:
	"And going forward we will rigorously enforce guidelines prohibiting goldplating".
	There is not much enforcement here—not even an unrigorous enforcement.
	In the Explanatory Notes to the order under Article 4.1.5, the Minister says:
	"The benefit of this measure to UK artists together with the cost-benefit analysis makes this an exceptional case justifying implementing beyond the absolute minimum required by the Directive".
	That is an extraordinary statement as it directly contradicts what the Minister said to the Select Committee in March 2005, where he said that applying a level below €3,000 would mean that the higher,
	"administrative costs become an absurdly high proportion of the actual payments which will go to artists".
	How does the Minister justify what he said to the Select Committee and what he said this evening? I fail to understand.
	The Minister attempted to justify it by claiming that the costs could be £1. If one replied to a request by letter, the stamp would cost 30p. What do the envelope and paper cost? The idea that a reply to DACS could cost £1 is ridiculous. I thought that it was a joke at one point. The time to employ someone just to deal with that whether by letter, fax or email, would be more than a pound. It is ridiculous. The art market itself thought that it would cost about £30. The Minister had the good grace to admit that the variations were between 46p and £50, but the idea of claiming that it was £1 is ridiculous. My noble friend Lord Howe amply demonstrated that in his intervention.
	It is even stranger when the Netherlands and Austria, both of which will be introducing this right for the first time, have opted to take advantage of the €3,000 limit. Now Germany, for example, which was one of the principal supporters of the directive, plans to exclude sales below €1,500 and may yet opt to exclude sales below €3,000. The French, who after all invented the whole process, seem to be dragging their feet and are not going to implement the directive on time at all. Perhaps the Minister could tell us what their timetable is. It is extraordinary that we are going to implement a European directive when the people in Europe who have been pushing it are not going to do so themselves.
	I do not accept the argument that the measure will necessarily drive a lot of sales abroad, because at the lower end that is difficult to do; at the higher end, it certainly will, and we have seen that with VAT, which has affected the art market, and has meant that sales have gone to Geneva and New York. But it will impose a whole load of costs on dealers, which will affect the value of that work of art, which will then be detrimental to the artist. So it is not going to work.
	The London Assembly, which is not notably a strong supporter of a vibrant business economy, has criticised the Minister, but he did not seem to take much note of that. The Minister was extraordinary dismissive, too, of the report from the Merits of Statutory Instruments Committee, on which my noble friend Lord Jopling sits. When the committee says that we may be inappropriately implementing European legislation, to dismiss that as the Minister did by saying that the committee did not study it closely is simply dismissive. The Government should address the issue properly, when the Merits of Statutory Instruments Committee comes up with something, and I am afraid that the Minister did not do so—and I have to say that it is not the first time that it has happened in this House. My noble friend Lord Inglewood asked a number of questions about EU law, which, again, I hope that the Minister will respond to.
	The House of Commons Culture, Media and Sport Committee, in its rather quick report, recommended a lower threshold; but it also recommended that there should be a review, and that we should see what the impact of that would be. Can the Minister give an assurance that in a review he will also look not at the total impact but at the impact of the limit? Will the Government be allowed to raise the limit? Can he assure me that we will not be as we have been under other EU legislation, such as that on VAT, whereby once you have set a limit it is impossible to change it?
	I shall be brief as it is getting late and I know that the Minister and my noble friend Lord Brooke will want to respond. As the Times leader says, what the Minister has done is to devalue and undermine the British position in the bigger battle over whether the resale right should after 2000 extend to dead artists. He has let down some of our European partners when we had that clear blocking majority, and those partners must be surprised. But the most surprising thing of all is the Government's whole response. What they did—and we supported them—was to go to Europe and win the battle, and then they came home and thought about it and surrendered. It is an extraordinary state of affairs.

Lord Sainsbury of Turville: My Lords, following the approval of these regulations, artist's resale right will be introduced in the UK. In response to the noble Lord's amendment, I believe I have dealt with some of the most substantial issues in my opening speech, but I shall add the following points.
	Before I do so, I should say to the noble Viscount, Lord Astor, that in no way did I say that the Merits of Statutory Instruments Committee did not take the issue seriously; what I said was that it did not give any weight to the interests of the artists, which is a quite different issue.
	I declare a life-long interest. I have collected works of art all my life. My father put together one of the great collections of modern art in the 20th century, and I was brought up in a world of artists, art dealers and auction houses. It is a world that I know very well and a world for which I have a great deal of respect.
	I should also make it clear that what we are debating is whether the threshold should be €1,000 or €3,000. That has absolutely nothing whatever to do with the question of the relocation of sales of works of art; at the top end, there is no way that works of art that are worth €2,000 are going to be taken to Switzerland or America to be sold. That is a complete fantasy. What we are talking about is a question of balancing costs and benefits to artists. The noble Lord, Lord Brooke, says that what we have done will shake the confidence of the art market. At a time when we have made it clear that we will seek to make the derogation for deceased artists permanent, I really cannot see that that argument has any force. The noble Lord, Lord Luke, asked why we had not made use of the derogation for deceased artists to 2012. The answer is that you can do that on the basis of the experience that you have had before that period; you cannot do it now when you have no experience of it. We will have to do surveys of what has happened and what the impact has been, and then in due course, around 2009, on the basis of that evidence make the case for extending the derogation.
	I also make it clear—when people talk about gold-plating and piling on regulations—that the administrative systems will have to be put in place whether we are talking about a threshold of €1,000 or of €3,000. Those administrative systems have to be put in place; the question is whether they will be used for a larger number of works of art.
	I will turn to the question of the figure of €1,000 or €3,000. By laying the threshold to €1,000, we calculate that about 800 extra works of art are likely to be included. Even if we take what we believe to be an extraordinary cost per transaction of £28 produced by the British Art Market Foundation—on the basis of no calculation whatever but just a figure taken out of the air—the total cost of those 800 works of art would be £22,400 for the whole art market per annum. That has to be seen in the context of the total value of the UK's art market of £4.6 billion. I have very great respect for the art dealers of this country. I believe that they would consider that paying £22,400 to help young artists—who at the end of the day produce the material that their livelihood is based on—was a very small price to pay.
	I say that it is an extraordinary figure because it is almost impossible to see how one would get a calculation as high as that. I agree with the noble Earl, Lord Howe, that quite a lot of operations have to be done, but they do not have to be done for very many items. I also agree that they would have to check DACS's figures, but even then I cannot see how you could possibly get to a figure of £28. I say to the noble Lord, Lord Marlesford, that I was a finance director for 17 years. I have looked at cost estimates, and £1 is a great deal nearer the reality in any competent organisation than £28. Indeed, at the last meeting that I had with the noble Lord, Lord Brooke, in happier times, he congratulated me on the thoroughness with which we were looking at the figures. Let us be clear; we have looked at these figures in detail, and I am absolutely convinced that the figure is much closer to £1 than £28. Even if you take the figure of £28, the total cost of the difference between €1,000 and €3,000 is £22,400.

Lord Jopling: My Lords, I am grateful to the noble Lord. In his opening speech, he told us that the cost was £1. He now tells us that it is nearer £1 than £28. Does he not agree that the implication of that is that he was totally wrong to try to fob us off with £1 earlier on?

Lord Sainsbury of Turville: No, my Lords. I was saying very clearly that I still think it is closer to £1. I did not say that it was £1; I said that it is in that order of magnitude. I have not just been saying that it is £28. I said that even if you think that it is £28, the total cost is £22,400. I very much doubt whether that will have a major impact on the economic viability of the UK art market. You have only to calculate how many pictures at what price at a reasonable buyer's premium to see that the odd picture would cover the whole cost of the whole UK art market. Noble Lords may think that that is gold-plating, but this is a fake—we are talking about a modest dab of moisture, not gold-plating.
	The noble Lord, Lord Brooke, drew attention to the comments that I made to the Select Committee. I have no problem with those comments. The whole point of consultation is to listen to the views put forward and to try to assess their validity and value. As we assessed the evidence, it became clear that many of the figures that we were being given were based on no calculation whatever; they were simply plucked from the air. The best calculations we had—they were not simply plucked from the air—were closer to £1 than £28. I gave BAMF every opportunity to challenge the figures and produce alternative calculations; it did not, which is why I assumed that it had no calculations and that no calculations had been made.
	A number of other points were made. The noble Lord, Lord Inglewood, raised the Berne convention. It was always extremely optimistic to think that the Swiss and American dealers would say, "What a good idea. We will go along with the artist's rights in this matter". We can use this as a way of going back and getting a permanent derogation on the basis that that has not come to pass. He also mentioned Article 295, which talks about prejudicing property rights. We do not believe that the regulations do that at all.

Lord Inglewood: My Lords, surely what has happened here is that, as the law stands, the owner of a work of art owns the entitlement to the entire proceeds of sale of the item in question. After the legislation comes into effect, he will own only an entitlement to part of the proceeds of the sale of the work of art. Surely that is therefore a change.

Lord Sainsbury of Turville: My Lords, on that basis, obviously the fact that a sum of money is deducted for buyer's premium could be said to be derogatory to the property rights as well.

Lord Inglewood: My Lords, with all due respect to the Minister, that is not correct, because the buyer's premium is deducted as the result of a contract. This is deducted as the result of a piece of legislation.

Lord Sainsbury of Turville: My Lords, I still cannot see that the provision in this context prejudices that; that is the legal view that has been taken.
	I agree very much with the noble Lord, Lord Freyberg, in what I thought was a rather objective assessment of the regulations. So far as European competitors are concerned, it seems that there is no pattern. The current available figures suggest that Germany, Denmark, Greece, France and Hungary will all come under €1,000; Italy, the Czech Republic and probably Ireland will be about €1,000; Belgium and Spain are between €1,000 and €3,000; while Austria, the Netherlands, Luxembourg, Portugal and Cyprus are at €3,000. Across Europe, people are taking different positions on this.
	The noble Lord, Lord Freyberg, raised the question of works of video art and whether they are covered by the definition of works of art. We do not think so, because we do not believe that they come in the category of graphic or plastic art, but there will be difficult borderline cases. We took the decision to use the definition in the directive so that there could be no accusations of gold-plating. It is not a very precise definition, but there cannot therefore be any queries about that. I am well aware of the recent criticism in the press, but many of the reports have been factually inaccurate and not based on the latest economic analysis, which we made available on the Patent Office website.
	Finally, I shall deal with another big question, which is why the Government have chosen to make the art market professional jointly liable for payment of resale right. If you take any look at the matter, that has to be the simplest means of operating resale rights. The art professionals are the people who have the experience in this, who can most easily deduct the sum of money, and would be expected to give advice on the issue to buyers and sellers. I cannot see any way that a counter-argument that someone else should do so could be made. If we did that, it would lead to a great deal more grief for everyone, including the art professionals.
	The Government firmly believe that our implementation will allow those artists who are most in need of financial support to gain from their creativity while minimising any risk of harm to the UK's thriving art market. We have not gold-plated this directive and we have not gone beyond what is required within the directive. In fact, in setting the threshold at €1,000, we have not gone as far as the directive allows. In making our decisions, we have carefully excluded those cases where the rewards do not justify the costs. Paragraph 55 of the Culture, Media and Sport Committee report, The Market for Art, states,
	"we do believe it should not benefit solely the richest artists. We recommend that the Government lowers the threshold at which the resale right applies from 3,000 to 1,000 euros".

Lord Marlesford: My Lords, can the noble Lord enlighten me before he leaves that point? The decision to go for €1,000 rather than €3,000 will produce some extra revenue for the artists concerned. What is the Government's estimate of the annual revenue per artist who will fall into that category—the additional money that they will receive from that reduction?

Lord Sainsbury of Turville: My Lords, I do not think that we have a total figure, but it obviously depends on what the spread of the figures is. Everyone can do their own calculation on this. There is a tariff and you can apply that to any figure within it. That will give you the result, minus the amount that DACS will take away, which will usually be equivalent to a quarter—but I will check that point and let the noble Lord know. It is not a difficult calculation and if he would like some help with that, we shall provide him with some examples of the figures and the amounts that DACS might withdraw.
	In closing this debate, I would like to reassure the noble Earl, Lord Howe, that the Government are committed to monitoring the impact of these measures, and we will revisit any issues which threaten our art market. If it is found that the measures do not work, we can go back to a figure of €3,000—it can be moved up as well as down. As it is unlikely that resale will be made compulsory under Berne, we will press for the derogation for deceased artists to be made permanent. Frankly, we should be focusing on that issue, the real threat to the British art market, if one is looking after the interests of that market, and not be concerned about £22,000 of extra costs.
	I thank noble Lords for an interesting debate and I commend the regulations to the House.

Lord Brooke of Sutton Mandeville: My Lords, I thank everyone who has spoken in this good debate. I shall do my best to conclude by 10 o'clock. Three departments look after the art market—the DTI, the Treasury and the Department for Culture, Media and Sport, to whose Select Committee inquiry the Minister gave his famous original answer. This is a culture matter and I express mild regret at the irony that the one department that is not represented on the Government Front Bench is the culture department.
	The issue raised in the Merits of Statutory Instruments Committee of your Lordships' House was that this regulation introduces an important matter in legal terms, as my noble friend Lord Inglewood said. I regret that it did not merit that same view from the DTI. There is symmetry in relation to the three departments. The Minister had only three supporters during the debate—three times more than he received in the press or on the media, when his only supporter was DACS, although I acknowledge that its chairman and chief executive wrote to the press. They might, however, be regarded as interested parties.
	I wish to respond to the three speeches made in support of the Minister. The noble Lord, Lord Dubs, said that the thresholds have been set at much lower levels by other countries, but he did not specify them. I have an uneasy suspicion that he was relying on Christopher Bryant's remarks in Westminster Hall on 8 November, which was quite some time ago. The German figure that Mr Bryant quoted was €50 at that stage; he said that the level was set at such-and-such a figure. As my noble friend Lord Astor said, the Germans have now moved their figure from Mr Bryant's notional €50 to at least €1,500 and are thought to be going higher still. That is the most vivid index of all that the Germans have learnt from experience that, at low levels, the right is very expensive to manage and administer. It is interesting that they should suddenly have gone up by an enormous margin because the directive allows them to do so.
	I sincerely congratulate the noble Lord, Lord Freyberg, on having changed his mind. It is too late tonight to conduct a seminar on how the secondary market works, although I would be happy to have a conversation with him outside the Chamber. I genuinely respect him for having changed his mind and for explaining why he did so.
	The spokesman for the Liberal Democrats, the noble Lord, Lord Clement-Jones, despite all he said about all the research that had been done, based his argument on the claim that 50 per cent of—I took him to mean British—living artists would benefit from the Government's decision. I do not think that even the Minister would make a claim above 1 per cent. I just cannot conceive of the quality of the research on which one could base the claim that 50 per cent of living artists would benefit. However, the noble Lord was the Government's third supporter. If the Minister feels that he has been well served by that support, I admire him profoundly.
	I agree with the Minister that the issue of relocation does not occur at the lower level; I agree that it does not apply to the threshold issue. I also agree with him that the derogation is of exceptional importance. However, I reiterate what I said in my opening speech: the fact that the Government could give up concessions that they had won so hard over the five years of negotiations does not inspire me—and I suspect may not inspire the art market—with any sense of constancy of purpose in terms of the next campaign. I agree that the derogation is very important and I am delighted to hear the Minister say that he thinks so, but it is just unfortunate that the actions that he has taken have, in fact, belied the words that he has uttered. If you weaken the top end of the market, as will happen if the derogation is not extended, unquestionably the bottom or lower end of the market will become weakened, too, as of course it is the profitability at the top end that enables so many other things to happen at a lower level.
	The Minister says that what the Government have done is not gold-plating. I do not know what gold-plating is if it is not what they have done; I do not know what the Chancellor of the Exchequer is saying when he says that gold-plating is no longer occurring. The principle of gold-plating is that you go further than the directive requires you to do, which is precisely what the Government have done on this occasion—that is, frankly, the gravamen of the charge that we have laid in front of them.
	I will not go on because, as I say, the hour is late. I told the private secretary to the noble Baroness the Leader of the House that my amendment would not be fatal. However, I hope that the Minister will take stock of how far he has been outnumbered and, it might be said, outgunned in this debate, which, instead of lasting 45 minutes as the Government thought, has actually lasted for nearly two hours. I hope that he will consider very seriously before he takes the matter forward in the way that he currently intends. As I said, my amendment was not intended to be fatal, so I beg leave to withdraw it.

Amendment, by leave, withdrawn.
	On Question, Motion agreed to.
	House adjourned at ten o'clock.